Yahoo! Japan to use Google search technology

TOKYO: Yahoo! Japan Corp will use Google technology to run its search engine and search ad delivery system, after a similar deal in the United States was derailed by regulators concerned about a monopoly.

The decision announced by Yahoo! Japan, which runs separately from its California-based namesake, means that the bulk of Internet searches done in Japan will use Google’s search engine rather than Yahoo! Inc’s.

Yahoo! Japan and Google both said enough independence would be maintained to keep the market competitive.

Yahoo! Inc, looking to cut costs as it lagged behind Google Inc, already dropped its own search service and adopted technology from rival Microsoft Corp’s Bing search engine, in a deal that was approved earlier this year by US and European regulators after a seven-month review.

A proposed partnership between Yahoo! and Google in the United States fell apart in 2008 after the Justice Department threatened to block it on antitrust grounds.

The Japanese Fair Trade Commission has traditionally been seen as more lenient than its US counterpart, although it has ruled against Microsoft for violating anti-monopoly laws in its contracts.

Google currently dominates the lucrative Internet search market worldwide. It generates income by charging advertisers to display links along with search results.

Few companies have the technology, user base and funds required to compete in search, and the shrinking number of players has raised concerns about privacy and fair competition.

Microsoft’s top lawyer blasted Google’s proposed expansion in Japan as “even more anti-competitive” as its aborted alliance with Yahoo! Inc in the United States would have been.

The deal “means there will be no search competition in Japan and that Google will end up controlling all personal search information for all Japanese consumers and businesses,” Brad Smith, Microsoft’s general counsel, said yesterday in a statement.

Japan had the third-largest Internet-using population in the world in 2008, behind the United States and China, with about 96 million users.

A government study last year projected the market for search-related ads accessed from PCs would increase 27% over the next three years to about US$2.3bil (RM7.4bil). — AP

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