As the Department of Justice continues its investigation of the proposed advertising partnership between Google and Yahoo!, parties on all sides are testifying, including Microsoft’s senior VP and general counsel, Brad Smith. In addition to antitrust issues, Smith cited privacy concerns: “If Google controls up to 90 percent of online search advertising it will have a complete picture of your online activities. Congress won’t need to enact a federal privacy policy; we will already have a national privacy policy – Google’s privacy policy.”
Google and Yahoo! remain poised to implement their deal in early October, but the Department of Justice will likely decide whether to block the deal within the next few weeks. Canada’s Competition Bureau is also jumping into the fray and will be reviewing the proposed deal.
Meanwhile, both companies continue to release innovative products. Google’s first phone was recently approved by the FCC. In addition to releasing Fire Eagle, Yahoo! also announced a partnership with Intel to bring interactive applications to TV sets.
Regardless of these products, the bread and butter of both companies still boils down to search market share. Unfortunately for Yahoo!, there are reports that Google’s search engine dominance is only increasing. Consequently, investors aren’t so sure about Yahoo!’s future prospects. Considering that many analysts think that Google will get the better end of its proposed deal with Yahoo!, the outcome of the Department of Justice’s inquiry is even more intriguing.
