As the old expression goes, I don't know what Yahoo! CEO Jerry Yang is smoking, but I want some. Yesterday Yahoo! announced that they had finally really absolutely unequivocally indubitably without question stopped talking to Microsoft about a takeover by, or joint venture with the Redmond giant, and that they had signed a deal with Google that essentially hands over their search marketing to Google for a slice of the revenue. In other words, they gave away what Microsoft was trying to buy from them. By the end of the day $3.6 billion in shareholder value had been lost. And it took about ten seconds for the most obvious result of a Yahoo!/Google linkup to rear its anti-trust head:
WASHINGTON, DC -- U.S. Senator Herb Kohl (D-WI), chairman of the Senate Antitrust Subcommittee, issued the following statement in response to today's announcement by Google and Yahoo:
"We will closely examine the joint venture between Google and Yahoo announced today. This collaboration between two technology giants and direct competitors for Internet advertising and search services raises important competition concerns. The consequences for advertisers and consumers could be far-reaching and warrant careful review, and we plan to investigate the competitive and privacy implications of this deal further in the Antitrust Subcommittee."
American antitrust law is different than such laws elsewhere. In Europe, a de facto private monopoly is more or less never allowed, and they subsidize your competition to get competition. In America, you are generally allowed to compete until the you're the last man standing, but you're not allowed to establish a monopoly by simply purchasing all your competitors. It's likely that the link-up with Google will be disallowed, and Yahoo! will be left with nothing but second place in search, soon to be made irrelevant by Google's growth. At least with Microsoft's money, they had a shot at hanging in there. Jerry Yang, please go to the cluephone. It's for you.