WPP's Sorrell would welcome Microsoft-Yahoo tie-up

LONDON (Reuters) - A proposed merger of Microsoft Corp and Yahoo would bring more balance to the online search market that is so dominated by Google and would likely be welcomed by advertisers, WPP's WPP.L Martin Sorrell said.

In an interview with Reuters, Chief Executive Sorrell said his clients would welcome more balance in the online ad market and said he expected the deal to go through.

Yahoo YHOO.O has rejected Microsoft's MSFT.O bid, valued at $41.4 billion, saying it undervalued the company. Microsoft countered by saying its offer was fair and urged the board to take a second look.

“The prospective Microsoft-Yahoo deal would bring more balance to the market and I think our clients would welcome that,” he said. “The question is can Microsoft do it effectively?

“I think it is probably going to happen but it is a question of execution. The idea that you’d have a more balanced market in search or display is something that we would welcome.”

Antitrust experts have previously told Reuters they believe any deal would be approved by regulators for the same reason.

Microsoft has said it plans to invest heavily in Web search to compete against Google, even if it fails to acquire Yahoo. It is engaged in trying to absorb last year’s $6 billion purchase of online advertising company aQuantive.

Microsoft Chairman Bill Gates told Reuters this month that Google was the only company with “critical mass” in Web search and that his company needed a bigger piece of the market.

Sorrell has previously criticized Google’s purchase of Web advertising supplier DoubleClick, saying it raised regulatory and data issues and would give the Internet group a huge share of the contextual and targeted online ad market.

Reporting by Kate Holton; Editing by David Hulmes