Microsoft casts a critical eye on Yahoo Japan's deal with Google |
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Yahoo Japan's decision to use Google's search and advertising systems in the country, announced earlier today, is drawing strong objections from Microsoft, which is partnering with Yahoo elsewhere in the world.
“This agreement is even more anticompetitive than Google’s deal with Yahoo! in the United States and Canada that the Department of Justice found to be illegal," said Brad Smith, Microsoft's general counsel, in a statement issued by the company today. "The 2008 deal would have locked up 90 percent of paid search advertising. This deal gives Google virtually 100 percent of all searches in Japan, both paid and unpaid. It means there will be no search competition in Japan and that Google will end up controlling all personal search information for all Japanese consumers and businesses.”
Yahoo Japan is an affiliate of Yahoo Inc., not a wholly owned subsidiary, which apparently opens the door for Yahoo Japan to choose its own search partner despite Yahoo's broader search partnership with Microsoft.
The choice of Google would be a blow to Microsoft in the country. The Redmond company would have increased its share of the search market in Japan from 3 percent to about 60 percent if the Yahoo deal had been implemented there, according to Dow Jones Newswires.
Asked whether Microsoft would attempt to prevent the deal, a Microsoft spokesman declined to comment.
Update: In a blog post, Microsoft deputy general counsel Dave Heiner goes into more detail and adds ...
Google reports that it already received approval from the Japanese Federal Trade Commission for the deal, even before it was announced and before the JFTC reached out to advertisers, publishers and competitors to learn about the likely competitive effects of the deal. It will be interesting to see over the next few weeks if that is really accurate.
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