Microsoft/Yahoo search partnership cleared by EU

BRUSSELS Thu Feb 18, 2010 10:20am EST

BRUSSELS Feb 18 (Reuters) - Microsoft (MSFT.O) won unconditional European Union approval on Thursday for its planned search deal with Yahoo Inc (YHOO.O) to challenge market leader Google (GOOG.O).

Under the terms of the partnership struck in July last year, Microsoft's Bing becomes the search engine for both while Yahoo focuses on attracting big advertisers. [ID:nN29216653]

Google had 90 percent of the global search market versus 7.4 percent for a combined Yahoo and Bing, according to November data from Web research firm StatCounter.

"The (European) Commission's first phase market investigation has indicated that scale is an important element to be an effective competitor in search advertising," the EU executive said in a statement.

It said the companies expected their partnership to strengthen Microsoft against Google.

The Commission said the deal would not significantly impede competition in Europe. Sources had told Reuters last week that the deal would be cleared without the companies offering any concessions. [ID:nBFA001062]

Google abandoned its own advertising deal with Yahoo in 2008 under pressure from the Justice Department. Microsoft had opposed the proposed tie-up.

(Reporting by Foo Yun Chee)