DOJ: Microsoft-Yahoo Deal Under Scrutiny

The agency quashed an earlier proposed deal between Google and Yahoo, so it is carefully doing its due diligence to prevent any perception of favoritism. The tougher scrutiny review also means the approval process for the partnership will take longer, a positive for Google.

Google currently has three times the U.S. sales of its two rivals. However, Microsoft is mounting a challenge, making significant inroads into the search market with Bing; adding Yahoo's advertising competencies could turn the software giant into a much more serious competitor to Google. Under the agreement, Yahoo would use the Bing search engine from Microsoft on its Web sites, and Yahoo would sell ads next to the search results.

According to Bloomberg, a person familiar with the matter said the companies expect to be asked about their search engine investments, ad pricing and product plans, and Microsoft expects to be asked to disclose its spending on Bing.

Still, Yahoo and Microsoft will be pressed to prove their arrangement won't inhibit competition -- that will ultimately be what determines whether the Microsoft-Yahoo deal gets done.