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FTC paved way for approval of Microsoft-Yahoo in approving Google-DoubleClick 4-1

I can't say I'm at all surprised to see Microsoft seek to acquire Yahoo. 

  • It makes obvious business sense for both Microsoft and Yahoo -- because it is the only viable and timely strategic option for either company to become a serious and credible competitor to Google-DoubleClick's rapidly increasing dominance of search and Internet advertising.
  • And given the FTC's surprisingly-strong consolidation-endorsing analysis of the Google-DoubleClick merger -- a previously-perceived yellow antitrust light to such a merger by Microsoft -- now has a bright blinking green light for approval.
    • Timing-wise it's obvious to Microsoft to get approval now while the getting is so good.
  • Moreover, Yahoo's faltering stock begged Microsoft to "Come on down! and play "The Price is Right!     

Essentially, the FTC paved the road for antitrust approval of a Microsoft-Yahoo combination with its recent 4-1 approval of Google-DoubleClick.

  • The FTC ruled definitively two months ago that the Internet advertising market has “vigorous” competition, which “will likely increase.”
  • The FTC also did not do "Second Requests for Information" for either Microsoft's acquisition of Aquantive or Yahoo's purchase of Right Media.
  • Given that the FTC just did a 7 month analysis of this market last year in the Google-DoubleClick investigation, and acquainted itself closely with Yahoo and Microsoft's respective competitive positions, it is possible that the FTC majority would not even see the need for a "Second Request for Information" for a Microsoft-Yahoo deal -- why waste the taxpayers money?
  • Moreover, the recent court extension of the Microsoft decree for another 18 months, ensures that the past competitive issues involving the desktop are essentially moot and irrelevant in the context of a potential Microsoft-Yahoo FTC review, because they are already taken care of under that decree.   

Given my in-depth analysis of this marketplace in the Google-Doubleclick merger, and my testimony before the Senate Antitrust Subcommittee, I strongly agree that the Internet advertising market demands scale -- just like Microsoft explained in its conference call.

  • Combining Microsoft and Yahoo would at least give them a shot at becoming a serious and credible competitive alternative to the increasingly dominant Google-DoubleClick.  
  • Without this combined entity as a new and enhanced competitor, this market is Googleopoly-bound.