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Microsoft's out, Google's in

The tug-of-war over Internet search and advertising between Google, Yahoo and Microsoft may be coming to an end.

TEXT OF INTERVIEW

Kai Ryssdal: The news all came crashing together in the space of about an hour today.

Word leaked that Microsoft had changed its mind this past weekend; said "Nah, we really don't want to buy Yahoo after all," told the board that.

Then we learned Yahoo and Google have come to an agreement to run search advertising together.

Marketplace's Bob Moon's on the story for us.

Hi Bob.

Bob Moon: Hey Kai.

Ryssdal: So Yahoo's stock dropped 10, 13-something percent on this news. How come?

Moon: Well, that's a sure sign that a lot of people still had hope this was going to be a deal that was going to happen, they'd make a premium when it did. This clearly isn't going to make maverick investor Carl Icahn very happy. He's bought up about 4 percent of Yahoo shares in recent weeks and he's been pushing Yahoo's executives and board of directors shall we say vociferously to salvage a deal with Microsoft and to get a higher price. Baring that, Icahn has said a partnership with Google would be his second choice. That's apparently what he's going to get.

Ryssdal: Alright, so we have this Yahoo-Google thing being confirmed after the markets closed today. Talk to me about antitrust.

Moon: Yeah, even before this deal was sealed there had been complaints that it could stifle competition and push online ad rates up. Executives from both companies have been arguing though that they don't see a problem with this because first of all, this is a non-exclusive partnership, not a merger and they say that they don't set prices for search advertising anyway, that they conduct auctions to sell their ads. But stay tuned.

Ryssdal: And indeed we will. Marketplace's Bob Moon. Thank you Bob.

Moon: Thank you Kai.

About the author

Bob Moon is Marketplace’s senior business correspondent, based in Los Angeles.
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