You are here

Countdown: 14 days until Google-Yahoo DOJ Deadline

Only 14 short days until Google-Yahoo's September 25th deadline for DOJ to complete its review of their proposed advertising partnership...

  • Adding some drama to the deadline, the San Francisco Chronicle captured Google's CEO Eric Schmidt's, 'make my day' attitude toward the DOJ review of his ad deal: 
    • ""We are going to move forward with it," ...after being asked whether the companies would wait for the Justice Department to complete its review."
    • Google's defiant attitude brings to mind a twist on another of my favorite movie quotes: "Approval! We don't need no stinkin approval!" 

Under section 16 of the redacted Google-Yahoo agreement submitted to the SEC, the companies gave the DOJ 105 days from June 12th  -- that's September 25, 2008, to complete their antitrust review (Google-Yahoo can extend that review deadline if they choose to). 

  • There is another interesting deadline in the Google-Yahoo agreement -- October 11 or 120 days after June 12th. 
    • Importantly, after October 11th either Google or Yahoo can terminate the agreement to "avoid or end a lawsuit" filed by antitrust authorities. They can also terminate the agreement if a court blocks the deal.

Past experience suggests Google won't back down easily if Justice challenges the agreement, given that Google routinely snubs its nose at U.S. governmental authority:

  • Google vigorously opposed a DOJ subpoena for assistance to crack down on child pornography, while Yahoo and America Online cooperated fully with the DOJ;
  • Google refused a request by the Chairman of the Senate Homeland Security  Committee to pull down al Queda branded content from its search results that encouraged terrorist acts against innocents. 
  • Google long resisted complying with California law to post its privacy policy on its home page.

As for Yahoo, Jerry "I've already burnt all my other bridges" Yang, the CEO of Yahoo, may also not be inclined to back down from a challenge with the DOJ.

  • Yang and Yahoo have clearly bet the farm that Google is their best path to keep from working with Microsoft. 
  • With its stock already at a five-year low, and Yahoo having won a begrudging vote of confidence from shareholders in July, Yahoo may believe they have little downside left in fighting on for several months. Can Yahoo's investors get much more disappointed?  

As for the DOJ, I believe the facts will drive DOJ's actions -- and as I have blogged many times before -- the facts are NOT Google and Yahoo's friends in this case.

  • DOJ also knows that the legal standard, -- for a court injuction to block an agreement that Government prosecutors argue is price-fixing, which is considered per se illegal -- very heavily favors the Government.   

Bottom line: It looks like a countdown to a showdown. 14 days and counting...

Q&A One Pager Debunking Net Neutrality Myths