DOJ to investigate Microsoft/Yahoo deal

The US Department of Justice (DOJ) is to take a closer look at the proposed deal between Microsoft and Yahoo over their search engine businesses.

The DOJ was already looking at the detail but has now asked both companies for more details about the merger, according to Bloomberg. In particular the DOJ will be examining search-engine investments, ad pricing and product plans for the future.

“The antitrust agencies are pretty skeptical of the argument that you need to be bigger to compete,” said Michael Katz, a former chief economist in the Justice Department’s antitrust unit.

“The Justice Department will respond, ‘Why can’t you get bigger by competing?’”

Under the proposed deal Yahoo will use Microsoft's Bing search engine and the two companies will split advertising revenue from adverts sold next to the search results.

“Yahoo and Microsoft are cooperating fully with the Justice Department and firmly believe that the information they will be providing will confirm that this deal is not only good for both companies, but it is also good for advertisers, good for publishers and good for consumers,” Adam Grossberg, a Yahoo spokesman, said in a statement.