Europe Gives Green Light to Microsoft and Yahoo Agreement

The proposed merger of Microsoft and Yahoo has been approved by European regulators. This opens the door for the two companies to combine their search engines and jointly compete against Google.

According to the Guardian, it has been confirmed that a ten-year cooperation plan, first publicly announced last summer, is now being implemented after the European Commission stated that it does not believe the agreement will harm consumers. Prior to this, the U.S. Department of Justice also confirmed its agreement with the collaboration of the two companies. Under the agreement, Microsoft’s technology will now power Yahoo’s search engine, and the two companies will share revenue from the site.

Yahoo’s CEO Carol Bartz, who reached the agreement after taking over the position last year, stated that the idea is to allow the company to focus on providing services to users on the internet while not being burdened by technology development. Steve Ballmer, a director at Microsoft, stated that the two companies will compete better against Google together.

The agreement is just the latest in a series of steps in a process that began two years ago when Microsoft offered $44 billion for Yahoo, which the California company deemed too low. Yahoo then briefly flirted with Google; however, those agreements were questioned by U.S. regulators. At the time Bartz took the helm at Yahoo, Microsoft launched its new search engine Bing and began investing significant money in marketing and attempts to regain some market share from Google.

The agreement is still awaiting approval from authorities in Asia; however, the first real implementation of the joint agreement is not expected before 2012. Despite its problems, Yahoo remains the second search engine. While it holds 17.5 percent of total search queries in the U.S. (Google 66 percent), globally, Yahoo and Bing together account for only 7.5 percent of searches compared to Google’s staggering 90 percent.  (Kristina Kardum)