As the Washington Post first reported July 2, 2008, (reported) the Justice Department's antitrust division is investigating the proposed advertising partnership between Yahoo and Google.
In May, at the request of the Justice Department, the two companies suspended the agreed-upon partnership for three and a half months, while the Department investigates antitrust issues related to the deal.
Yahoo contends that the investigation is not unusual, washingtonpost.com reports. However, attorneys familiar with similar Department of Justice antitrust investigations say that the type of requests now being made by the Department are not routine.
"They don't do it without having identified significant issues," said M.J. Moltenbrey, a Freshfields, Bruckhaus, & Deringer lawyer, who was director of civil non-merger enforcement in the Justice Department's antitrust division in the 1990s. "It involves approval at higher levels within the antitrust division." washingtonpost.com reports.
The Justice Department, and Google, have not commented on the investigation. However, Google competitors and critics complain, Google will gain a monopoly on internet advertising, if the Yahoo deal is approved.
Only weeks prior, Yahoo rejected Microsoft's "unsolicited" $44.6 billion takeover bid, which was a $31 per share offer. Yahoo's stock price has been on a wild ride since the announcement of potential developments, earlier this year.
Yahoo's stock has traded as high as $40 per share when the Microsoft deal was announced in February, but, in recent weeks, it has remained under the $31 per share price offered by Microsoft. In fact, Yahoo's stock has traded as low as $24 per share since the Microsoft offer was rejected.
Before formally rejecting the Microsoft offer, Yahoo stated it would accept a $41 per share offer from Microsoft. Microsoft, however, did not counter. In response, Yahoo proceeded to close the advertising deal with Google, which is now under DOJ scrutiny.
Regardless, Microsoft is preparing a new offer for Yahoo, and it has approached other media companies about joining in the deal, the Wall Street Journal reports (Microsoft Seeks Partners for New Yahoo Run). Microsoft has held discussions with Time-Warner and NewsCorp, among others, the Journal reports.
[More on both the Yahoo/Google antitrust investigation, and Microsoft's renewed takeover bid, shortly].
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