Closed Prediction
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Yahoo!/Google ad deal fails regulatory muster?

Bradley Baker
Submitted by Bradley Baker06.25.2008
Categories
Comments 28
This prediction is closed and has been judged.
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Judgment on Dec. 4, 2008:  In a rare moment, the community actually got this one wrong.  Based on recent news reports, it has been revealed that the deal was scrapped, "...just three hours before the Department of Justice planned to file antitrust charges to block the pact, according to the lawyer who would have been lead counsel for the government."  Judged at 100%, for having "faiied regulatory muster" per the prediction's intent.  -- The Industry Standard

Original prediction: Various groups, including most notably Microsoft, are likely to express concerns to the Department of Justice about the recently-announced advertising partnership between Yahoo! and Google.

Those companies have publicly stated that they don't believe regulatory approval is necessary, but that in a show of good faith they intend to seek it prior to the commencement of activities under the deal.

This is a prediction that the partnership deal will be thrown out by the DoJ and/or FTC. 

There has been some recent movement in this story here.  This prediction will be judged after Yahoo and Google officially receive the blessing of the U.S. federal government.

Price History

Prediction Statistics
Betting Closes:Sep 30 2008Current Consensus:34.30%Total Bets:29
Today's Change:
0%
Life Time High:54.98%
Life Time Low:21.42%

Comments

Yes, the DOJ does plenty of hand wringing. Maybe I'm feeling particularly cynical today, but usually big business wins.

Eric Hill
Eric Hill Jul 07 2008 | 04:19PM #

"This prediction will be judged after Yahoo and Google officially receive the blessing of the U.S. federal government. "

This makes the ROI indeterminate.What happens if this drags on like XM/Sirius case? Would hate to have $ frozen on such a prediction :(

David Kuan
David Kuan Aug 12 2008 | 09:13PM #

My original intent was that if the deal starts after the voluntary 3.5 month delay (plus additional voluntary delays from Yahoo!/Google) and isn't halted by the government (in the guise of one of the various agencies/Congress/etc.) that this should be judged at 0%. The closing date was selected to reflect that timeframe.

That there was a possibility of long-term freeze did not escape me when I originally wrote it. If this goes into a suspended state where the DoJ (etc.) are continuing to examine the deal and Yahoo! and Google continue to delay actually starting, this prediction should remain unjudged.

Looking at it right now, I was imprecise in my language. I specified DoJ or FTC. I would also consider a ban from Congress, etc. as also deserving a 100% judgment. Given that I didn't write it that way I would have no problems with the official interpretation being that only actions from those two bodies count, however.

Eric- perhaps you could issue a clarification on whether other (Federal only?) governmental action would also count for this?

Bradley Baker
Bradley Baker Aug 14 2008 | 10:15PM #

@Bradley and TIS, how will this be judged if either Google/Yahoo abandons the deal?

David Kuan
David Kuan Sep 09 2008 | 03:09PM #

@Bradley and TIS, did not get an answer from last time so I am asking again. How will this be judged if either Google/Yahoo abandons the deal? According to the Google/Yahoo deal (http://www.sec.gov/Archives/edgar/data/1011006/000089161808000399/f42710...), it states that

16.2.1 The Parties will implement the Services under this Agreement 105 days after the Effective Date (or as extended upon agreement of the parties), or sooner if a Governmental Authority provides notice that any regulatory issues, objections or concerns have been resolved.

The 105 days points to a September 25 date. DOJ decision may not happen by then. However, there is stipulation for both parties to extend the date as needed.

Also, October 11 is the date by which Google and/or Yahoo can decide to abandon the deal to avoid lawsuit.

16.2.4 Either Party may terminate the Agreement (a) 120 days after the Effective Date in order to avoid or end a lawsuit or similar action filed on competition-law grounds if (i) such party has taken all actions in compliance with this Section 16.2 including offering to make commercially reasonable amendments to this Agreement, and (ii) defending such action is not commercially reasonable with respect to that Party (taking all factors into account, including without limitation effects on a party’s brand or business outside the scope of the Agreement); or (b) if a court of competent jurisdiction has entered an order enjoining the implementation of the Agreement.

Articles:
http://blogs.ft.com/techblog/2008/09/jerry-yangs-next-date-with-destiny-...
http://precursorblog.com/content/countdown-14-days-until-google-yahoo-do...

David Kuan
David Kuan Sep 13 2008 | 02:45AM #

The deal was delayed on Thursday. Not thrown out, but delayed. It is unclear when a judgment might occur. It does seem to cast some doubt on a favorable outcome, however. Only time will tell.

Eric Hill
Eric Hill Oct 04 2008 | 03:34PM #

Looks like Yahoo and Google are planning for concessions with DOJ to gain approval.

David Kuan
David Kuan Oct 14 2008 | 06:30PM #

This is seeming less and less likely.

Eric Hill
Eric Hill Oct 29 2008 | 04:28PM #

Indeed, as the WSJ reports, this could be judged/determined next week.

Eric Hill
Eric Hill Oct 31 2008 | 05:00PM #

Looks like those with active bet on this one will have to wait a tad longer as Yahoo/Google revise deal plan and resubmit to DOJ.

http://www.reuters.com/article/technologyNews/idUSTRE4A26OW20081103?feed...

David Kuan
David Kuan Nov 04 2008 | 02:13AM #

Well.. this one can now be judged. Google has just announced decision to abandon the deal with Yahoo.

David Kuan
David Kuan Nov 05 2008 | 04:30PM #

This is kind of a tricky one, guys.

If you read today's reports, they say, "The U.S. Department of Justice was planning to block Google's proposed advertising deal with Yahoo, leading to Google's announcement Wednesday that it was backing out, according to Yahoo."

In my mind, that would render a favorable judgment towards, "Yahoo!/Google ad deal fails regulatory muster?" However, I could see an argument made that due to the way Bradley stated, "This is a prediction that the partnership deal will be thrown out by the DoJ and/or FTC," - which didn't specifically happen - some could ask for a 0% judgment.

I'm leaning towards favorable judgment due to the news reports today, but am curious about your opinions.

Eric Hill
Eric Hill Nov 05 2008 | 06:06PM #

While the deal wasn't "thrown out", it's certainly not going to pass regulatory muster ("This prediction will be judged after Yahoo and Google officially receive the blessing of the U.S. federal government.") - which I assume would be the requirement for success. Also, I think we can assume Google feels any acceptable deal to them would in fact be "thrown out" or else they wouldn't have walked.

So I'd say it's definitely not a 0%, it's arguably a 100%, and it's certainly a gray area.

Daniel Fort
Daniel Fort Nov 05 2008 | 06:47PM #

That is why I asked early on how this prediction is to be handled if deal is abandoned. No response was received to address that.

David Kuan
David Kuan Nov 05 2008 | 07:21PM #

A little more..."To Yahoo's dismay, Google backed off to avoid a challenge from the U.S. Justice Department, which said it would sue to block the Yahoo deal to preserve competition in Internet advertising." Could be viewed as a "failed to meet regulatory muster". Definitely leaning more towards a 100% judgment. Unfortunate gray area.

Eric Hill
Eric Hill Nov 05 2008 | 10:17PM #

I don't think anything else is coming on this.

Daniel Fort
Daniel Fort Nov 19 2008 | 02:43PM #

Less gray: http://amlawdaily.typepad.com/amlawdaily/2008/12/hogans-litvack.html

They called it off three hours before officially "failing regulatory muster".

Daniel Fort
Daniel Fort Dec 04 2008 | 03:59PM #

@Daniel, I am a little confused by your comments (which suggests a 0% judgment on a technicality). You have a FOR bet and would stand to make sizable gains with a 100% judgment.

Nevertheless, my opinion is that it is clear that federal government threat to file a suit is a sign of non-approval regardless of whether Google/Yahoo abandons the deal prior. As such, a 100% judgment should be rendered for this prediction.

David Kuan
David Kuan Dec 04 2008 | 06:01PM #

@David, I think you and Daniel are saying the same thing.

Based on the interesting report revealing the way the U.S. government is considering Google a near-monopoly now, this looks like a done deal.

Judged at 100%.

Eric Hill
Eric Hill Dec 04 2008 | 07:00PM #

@David - I did indeed mean less gray in a towards 100% direction.

Daniel Fort
Daniel Fort Dec 04 2008 | 11:35PM #

@Daniel, my bad and congrats for breaking the $5M mark!

David Kuan
David Kuan Dec 05 2008 | 12:12AM #

@David - Thanks! It's been a long time coming.

Daniel Fort
Daniel Fort Dec 05 2008 | 02:38PM #

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