EU OK seen for Microsoft/Yahoo search deal: sources

BRUSSELS Fri Feb 12, 2010 6:10pm GMT

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BRUSSELS (Reuters) - Microsoft (MSFT.O) is expected to secure unconditional EU approval for its landmark search deal with Yahoo Inc (YHOO.O) to challenge market leader Google (GOOG.O), sources familiar with the situation said on Friday.

U.S. software company Microsoft and Internet firm Yahoo signed a 10-year global Web search partnership last July, which must be approved by regulators to take effect.

The European Commission, competition watchdog of the 27-country European Union, has a self-imposed deadline of February 19 to approve or block the deal.

It can extend the review and seek remedies from the companies if it believes the transaction might hurt rivals or consumers. Friday was the last day for Microsoft to submit such proposals.

The company has not done so, one of the sources said.

"I expect clearance without any concessions next Friday," that person said.

Experts said any regulatory concern would be minimal because of Google's dominance.

Google had 90 percent of the global search market versus 7.4 percent for a combined Yahoo and Microsoft's Bing, according to November data from Web research firm StatCounter.

In a questionnaire sent to rivals and consumer groups last month and seen by Reuters, the Commission asked whether the merger would allow Microsoft to compete better against Google.

Google abandoned its own advertising deal with Yahoo in 2008 under pressure from the U.S. Justice Department. Microsoft had opposed the proposed tie-up.

Microsoft in December ended a decade-long battle with the European Commission by letting European consumers have better access to rival Internet browsers in its Windows operating system.

(Editing by Dale Hudson)

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