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Yahoo!/Google ad deal fails regulatory muster

Bradley Baker
Submitted by Bradley Baker06.25.2008
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Comments 11
This prediction is closed and is in the process of being judged.
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Various groups, including most notably Microsoft, are likely to express concerns to the Department of Justice about the recently-announced advertising partnership between Yahoo! and Google.

Those companies have publicly stated that they don't believe regulatory approval is necessary, but that in a show of good faith they intend to seek it prior to the commencement of activities under the deal.

This is a prediction that the partnership deal will be thrown out by the DoJ and/or FTC. 

There has been some recent movement in this story here.  This prediction will be judged after Yahoo and Google officially receive the blessing of the U.S. federal government.

Current Community Consensus 34%

Prediction Statistics
Betting Closes:Sep 30 2008Current Consensus:34.30%Total Bets:29
Today's Change:
0%
Life Time High:54.98%
Life Time Low:21.42%

Comments

Yes, the DOJ does plenty of hand wringing. Maybe I'm feeling particularly cynical today, but usually big business wins.

Eric Hill
Eric Hill Jul 07 2008 | 04:19PM #

"This prediction will be judged after Yahoo and Google officially receive the blessing of the U.S. federal government. "

This makes the ROI indeterminate.What happens if this drags on like XM/Sirius case? Would hate to have $ frozen on such a prediction :(

David Kuan
David Kuan Aug 12 2008 | 09:13PM #

My original intent was that if the deal starts after the voluntary 3.5 month delay (plus additional voluntary delays from Yahoo!/Google) and isn't halted by the government (in the guise of one of the various agencies/Congress/etc.) that this should be judged at 0%. The closing date was selected to reflect that timeframe.

That there was a possibility of long-term freeze did not escape me when I originally wrote it. If this goes into a suspended state where the DoJ (etc.) are continuing to examine the deal and Yahoo! and Google continue to delay actually starting, this prediction should remain unjudged.

Looking at it right now, I was imprecise in my language. I specified DoJ or FTC. I would also consider a ban from Congress, etc. as also deserving a 100% judgment. Given that I didn't write it that way I would have no problems with the official interpretation being that only actions from those two bodies count, however.

Eric- perhaps you could issue a clarification on whether other (Federal only?) governmental action would also count for this?

Bradley Baker
Bradley Baker Aug 14 2008 | 10:15PM #

@Bradley and TIS, how will this be judged if either Google/Yahoo abandons the deal?

David Kuan
David Kuan Sep 09 2008 | 03:09PM #

@Bradley and TIS, did not get an answer from last time so I am asking again. How will this be judged if either Google/Yahoo abandons the deal? According to the Google/Yahoo deal (http://www.sec.gov/Archives/edgar/data/1011006/000089161808000399/f42710...), it states that

16.2.1 The Parties will implement the Services under this Agreement 105 days after the Effective Date (or as extended upon agreement of the parties), or sooner if a Governmental Authority provides notice that any regulatory issues, objections or concerns have been resolved.

The 105 days points to a September 25 date. DOJ decision may not happen by then. However, there is stipulation for both parties to extend the date as needed.

Also, October 11 is the date by which Google and/or Yahoo can decide to abandon the deal to avoid lawsuit.

16.2.4 Either Party may terminate the Agreement (a) 120 days after the Effective Date in order to avoid or end a lawsuit or similar action filed on competition-law grounds if (i) such party has taken all actions in compliance with this Section 16.2 including offering to make commercially reasonable amendments to this Agreement, and (ii) defending such action is not commercially reasonable with respect to that Party (taking all factors into account, including without limitation effects on a party’s brand or business outside the scope of the Agreement); or (b) if a court of competent jurisdiction has entered an order enjoining the implementation of the Agreement.

Articles:
http://blogs.ft.com/techblog/2008/09/jerry-yangs-next-date-with-destiny-...
http://precursorblog.com/content/countdown-14-days-until-google-yahoo-do...

David Kuan
David Kuan Sep 13 2008 | 02:45AM #

The deal was delayed on Thursday. Not thrown out, but delayed. It is unclear when a judgment might occur. It does seem to cast some doubt on a favorable outcome, however. Only time will tell.

Eric Hill
Eric Hill Oct 04 2008 | 03:34PM #

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