Google clout seen aiding Microsoft antitrust OK

By Diane Bartz and David Lawsky

WASHINGTON/SAN FRANCISCO (Reuters) - Google Inc (GOOG.O) so dominates the online search and advertising market that regulators are seen approving any merger of Microsoft Corp (MSFT.O) and Yahoo (YHOO.O) after giving the deal a close look, antitrust experts said on Friday.

The world's biggest software maker sent a letter to Yahoo on Thursday offering $44.6 billion (23 billion pound) for the Internet media company. Yahoo said on Friday it will evaluate the offer.

Evan Stewart of Zuckerman, Spaeder LLP said antitrust approval of such a deal was likely because Google was so big, the information technology field was changing so fast and barriers to entering the market were relatively low.

"At the end of the day, it's hard to see how they (regulators) could reject this," said Stewart.

William Mahnic, who teaches mergers and acquisitions at Case Western University, agreed, saying Yahoo's and Microsoft's market shares together total considerably less than Google's.

"The big thing here is that Google has such a huge share," said Mahnic, who forecast the deal would be approved with neither company forced to divest any assets.

Antitrust enforcers on both sides of the Atlantic typically take a hard look at any merger which knocks the number of major competitors in an industry down from three to two because of the danger the remaining entities could raise prices.

In 2001, HJ Heinz Co (HNZ.N) called off its acquisition of Beech-Nut after regulators balked because it would have merged the No. 2 and No. 3 baby food makers.