Consumer watchdog confirms MicroHoo Bing investigation

James Riley
Friday, 31 July 2009 08:01

Business IT - Technology

The Australian competition watchdog has confirmed it will investigate the proposed Microsoft/Yahoo search partnership and its potential impact on local advertising and media markets.

The Australian Competition and Consumer Commission said it would list the 10-year strategic relationship on its Mergers Register later today. The listing process confirms that the ACCC has extended its interest in the announcement beyond a watching brief.

Search giant Google, meanwhile, issued a two line corporate statement on the Microsoft-Yahoo arrangement, suggesting the strategic relationship might be bad for competition.

Microsoft and Yahoo said this week a strategic tie-up in would see Yahoo use Microsoft’s Bing search engine on its sites and share advertising revenue from search sales with the Redmond software giant.

The deal has unusual implications for the Australian market, where both Yahoo and Microsoft operate joint-ventures, through Yahoo7 and Ninemsn respectively.

The ACCC will not comment on current investigations – as the Microsoft/Yahoo proposal is now classified – but it is thought that it will look at whether there is an advertising impact through media concentration in addition to its search implications.

Google issued a statement suggesting the Microsoft/Yahoo deal might harm competition – but saying it was too early to tell.

“There has traditionally been a lot of competition online, and our experience is that competition brings about great things for users,” the Google statement said. “We're interested to learn more about the deal.”

Google Australia officials declined to comment directly on the implications of the deal for the local market, not whether there were any special considerations inAustralia as a result of the two joint-venture arrangements.

The Yahoo7 and Ninemsn joint-ventures are unusual for both companies, but they are not unique.

Analysts will be watching the treatment of the Bing arrangements by Alibaba.com, the China-based B2B e-commerce website. China is a market market where Google doesn’t dominate search in the way in deos in the West.