EU set to give Microsoft Yahoo deal the nod

SOFTWARE LEVIATHAN Microsoft is likely to get unconditional EU approval for its landmark search deal with Yahoo in its bid to challenge market leader Google.

The Vole and Internet portal firm Yahoo signed a 10-year global web search partnership last year, which must be approved by regulators before it can take effect.

The European Competition Commission watchdog has a self-imposed deadline of February 19 to approve or block the deal. The Commission could have ordered Microsoft to come back to it with remedies if it thought that it might hurt rivals or consumers, but Friday was the last day for it make such a proposal and it didn't.

The Commission has been saying privately that Google's dominance means the Microsoft Yahoo deal will have a minimal effect on the markets. Google has 90 per cent of the global search market versus 7.4 per cent combined for Yahoo and Microsoft's Bing.

In a questionnaire sent to rivals and consumer groups last month and seen by Reuters, the Commission asked whether the merger would allow Microsoft to compete better against Google.

Google dumped its own advertising deal with Yahoo in 2008 under pressure from the US Justice Department. Microsoft had opposed Google's proposed link with Yahoo.

On this basis it is expected that the Commission will approve the Microsoft Yahoo deal on Friday.

The deal still has to get the nod from the US regulators. µ