Microsoft, Yahoo in talks with EC about search deal

Representatives from Microsoft and Yahoo have filed paperwork for regulatory clearance in the US for their proposed search deal, but it remains unclear how to proceed in Europe, a Microsoft spokesman said on Wednesday.

The issue that remains in Europe is "determining whether or not the deal requires formal notice before the [European] Commission and if not, do we need to file notice [in individual countries that might have an interest in reviewing the deal]", said Microsoft spokesman Jack Evans.

These jurisdictional issues are being discussed in ongoing talks that Microsoft and Yahoo have been having with Commission officials, which were the subject of a Reuters report, according to Evans.

"We have had informal discussions in Europe about the agreement just as we indicated we would when the deal was announced," he said.

Yahoo representatives familiar with the matter did not immediately respond to an email seeking comment.

Last week, the companies said the US Department of Justice had asked for more information about their deal under which Microsoft would provide search for Yahoo's web pages, thus bringing to a close Yahoo's tenure as a search provider.

The antitrust scrutiny is likely to be more intense in the US, where Google has about three quarters of the search market and Microsoft and Yahoo combined have about one fifth, than in Europe where Google's market share exceeds 90 percent.

In a statement, a Yahoo spokesperson said: "Yahoo and Microsoft are committed to engaging positively with the Commission about the agreement and firmly believe that the information we will be providing will confirm that this deal is not only good for both companies, but it is also good for advertisers, good for publishers, and good for consumers. As we have indicated previously, we're hopeful the agreement will close in early 2010."