US Senate to probe Goo-Hoo!

Fear not. Escape hatch in place


The US Senate's Antitrust Subcommittee will investigate Yahoo!'s Ballmer-battling search tie-up with Google.

Yesterday, as Jerry Yang and company announced the death of talks with Microsoft, Google officially told the world it plans on serving ads to Yahoo!'s search engine in the US and Canada. And this sparked a a few words from Senator Herb Kohl, head of the Antitrust Subcommittee.

"We will closely examine the joint venture between Google and Yahoo announced today," his statement read. "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."

Of course, this is hardly surprising. And the AntiSubCommittee isn't the only one probing. But Google says it has things covered. "We have been in contact with regulators about this arrangement, and we expect to work closely with them to answer their questions about the transaction," the said company yesterday. "Ultimately we believe that the efficiencies of this agreement will help preserve competition."

Even if regulators do approve the deal, it may not last. As eWeek noticed, Google slipped an escape clause into the agreement. If revenues fail to reach about $83m over a four month period, says a brand new SEC filing from Yahoo!, Google can bail after 10 months.

Google can also bag the agreement if Yahoo! fails to maintain at least 50 per cent of the company's voting power - and that number jumps to 65 per cent in the event of a transaction with Microsoft, Time Warner, or News. Corp. If Yahoo! ownership changes hands over the next two years and the deal is terminated, it must fork over $250m to Larry and Serg - minus a few million here or there, depending on how successful the tie-up was.

As Bloomberg reports, the money-minded folk at Merrill Lynch estimate that Google will make an extra 15 cents a share on this Yahoo! pact over the next year.

If regulators give the OK. ®


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