Microsoft, Yahoo! Deal approved by U.S. and European Commission

The European Commission and US Department of Justice have both approved a Microsoft and Yahoo! deal that will see the software giant acquire the internet search and search advertising businesses of Yahoo!.

In a statement on Thursday, the European Commission (EC) concluded that the market shares of both Microsoft and Yahoo! were limited. "In the EEA, Microsoft's and Yahoo!'s activities in internet search and online search advertising are very limited with combined market shares generally below 10%. Google, by contrast, generally enjoys market shares above 90%" said an EC spokesperson.

"Implementation of the deal is expected to begin in the coming days and will involve transitioning Yahoo!’s algorithmic and paid search platforms to Microsoft, with Yahoo! becoming the exclusive relationship sales force for both companies’ premium search advertisers globally" said both companies in a joint statement.

Microsoft and Yahoo! both announced the deal in July 2009, seeking closure and approval for the deal in early 2010. In the coming months, Yahoo! search results will be provided and branded with Bing, "powered by Bing" will likely begin to appear. The term of the agreement is 10 years but each company will maintain its own separate display advertising business and sales force. Rumours that the company would receive European approval circulated last week and many analysts forecast Thursday as the approval date.

Microsoft CEO Steve Ballmer was upbeat about the deal approval. “Although we are just at the beginning of this process, we have reached an exciting milestone,” Ballmer said. “I believe that together, Microsoft and Yahoo! will promote more choice, better value and greater innovation to our customers as well as to advertisers and publishers.”

Yahoo! provided additional information about the coming integration. In a blog posting, Shashi Seth, Senior VP of Yahoo!'s Search Products confirmed that basic search listings and ads will be provided by Microsoft. "Yahoo! will continue to enhance the search result listings as we do for people today" he said.

Seth also confirmed Yahoo! will create ways to find things faster using Search Assist technology and weaving search more deeply into other Yahoo! products. Yahoo! also said it would allow users to explore search results better by providing otpions for organizing search results pages or by showing users interesting search topics based on search results. Productivity apps and other tools for search improvements are also expected to be in the works.

Both companies also launched where they will detail their progress and provide updates for partners and Yahoo! users in the near future.

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