Microsoft Not Happy with Yahoo Japan, Google Deal

Yahoo Japan Corp did the exact opposite of what Yahoo Inc. did: The company chose to align forces with Google Inc. instead of with Microsoft. Now Microsoft is criticizing the deal, claiming that the partnership may create a monopoly over the search market in the nation. Nevertheless, the Japanese FTC gave the OK to go ahead with the deal after saying that the regulatory body would be "continue to monitor the progress of the deal for any possible breaches of anti-monopoly laws," according to Reuters.

Deal Details

Microsoft and Yahoo Inc. have partnered in Europe and the United States, so the company believes that Yahoo Japan Corp should have also partnered with Microsoft. However, Microsoft's search engine, Bing, only holds about three percent of the market share worldwide, while Yahoo Japan holds more than 50 percent. While Google Japan only held 2.17 percent of the Japan search engine market share in November, worldwide it holds more than 82 percent.

Additionally, Google has more experience and the technology available to handle foreign language searches. According to Yahoo Japan President Masahiro Inoue in July, Microsoft simply cannot handle the specific foreign language needs of Japanese searchers. While Google and Yahoo both have separate search engines for each market, Microsoft does not. Not only would Microsoft have to develop an entirely new way of running their searches, but they would also have to develop a way to handle Japanese characters recognition and build it into the search engine as well. This could take theoretically billions of dollars and months, if not years to complete. It was only logical for Yahoo Japan Corp to align forces with Google considering these facts.

What If...

That leaves the question of what would Microsoft have done if Yahoo Japan Corp had, in fact, chosen the company to partner with instead of Google Inc.? Would it still have criticized, claiming possible anti-trust issues? Probably not. The fact is that Japan is the third largest search market in the world and Microsoft needed to gain ground in that market, otherwise, its search engine simply might not survive.

Microsoft itself has had its own anti-trust issues to deal with, since the beginning of the 1998 case against the company on behalf of 20 states and the Department of Justice. The final judgment filed after an appeal that was denied expired in November of 2006 contained the settlement stipulations and the details of how Microsoft was wrong. Microsoft has similar issues in the European union, which also sued the company. Microsoft settled in both instances as well as settling private suits, all of which totaled multiple billions of dollars. Now that the tide is turning and other companies such s Yahoo Japan Corp and Google Inc. are partnering and leaving Microsoft out of the deal, the anti-trust suits might heat up, but it will be a much fairer world.