Late last month, Matthew Cantor, a partner in the New York law offices of Constantine Cannon, said regulators (like the antitrust division of the Department of Justice) will not let the Microsoft-Yahoo search deal stand without modification. Last Friday, CNET News blogger Tom Krazit reported that the DoJ has indeed asked the two companies for more information on the deal they are looking to complete.
Though no one knows exactly what the DoJ wants to know, Krazit says the agency is probably looking at two things. First, will advertisers suffer because one player in the search field has been eliminated? Second, will Google have less incentiive to compete as a result of the deal? The increased scrutiny into the merger is likely the result of the economic crisis the country has seen recently, as well as the change in U.S. administration, according to Donald Russell of Robbins Russell in Washington.
If the regulators require Microsoft and Yahoo to sell Yahoo's search technology in order for the deal to close, as Cantor has suggested, Krazit says Microsoft may just drop the whole thing. He notes:
The company has spent millions on the development and launch of Bing, but it likely is interested in retaining certain aspects of Yahoo's search technology, not to mention some of its engineers.