Tuesday will be an important day in Washington, D.C., a day that could change the course of history. At least for Internet powers Yahoo! Inc. [
YHOO] and Google Inc. [
GOOG]. The Deal has learned that's the deadline for the two companies to take their last shot at winning Justice Department approval for their proposed search advertising alliance. But the chances of a last-minute breakthrough appear longer than Sen. John McCain's odds to win the Presidency.
The task for the companies -- to convince antitrust regulators the partnership won't be a threat to competition -- appears daunting, with insiders saying there's no way that a partnership between two of the top three search advertising firms can avoid hurting competition.
According to a source involved in the review process, Assistant Attorney General Tom
Barnett told lawyers for the companies last Thursday that negotiations were over, and Barnett said the final
proposal must come this week, ideally by Tuesday. The two
companies originally drafted a 10-year contract, but had whittled away the
scope of their proposed cooperation and entertained DOJ's request to cut the
contract to as short as one year. There were also talks over minimizing the
amount of searching the companies could cooperate on.
The DOJ could file a complaint seeking a preliminary injunction on
the agreement even as the parties assess their options. Antitrust lawyers said
the government would have to clear a high hurdle to win a preliminary
injunction. But it is even less likely that Google and Yahoo! would want to
battle the government in court over such a controversial deal, particularly
while the financial market is so precarious, the lawyer said.
-- David ShabelmanSee Oct. 31 post from Tech Confidential
Continue reading below
