The US Justice Department is apparently all in a tizz about the Microsoft Yahoo deal. While it is not actually a buy-out it does have some pretty strong components which normally would cause an anti-trust watchdog cause for concern.

Microsoft and Yahoo confirmed Friday that the Justice Department has asked the two companies for more information about their deal, which is a step beyond taking a mere interest in the proceedings. However the DoJ interest is strange given that it is an alliance of two lesser companies, at least in the search market, to take on the biggest, According to CNET the Justice Department is likely looking at two different aspects of the deal. On one hand, regulators are expected to probe whether advertisers will be harmed by the loss of an outlet for their ad dollars, as well as whether Google has less incentive to compete for searchers.

The deal is going to eliminate a competitor in search in a market that has high barriers to entry and only has three players. Analysts believe that the Justice Department will force Microsoft and Yahoo to put Yahoo's search technology assets up for auction to let the deal go through. This will allow a third major player to enter the business.

Of course this is largely pointless. It is a doodle to create a search engine, it is harder to get people to use it. Microsoft has spent a fortune on development and launch of Bing and it will want Yahoo's search technology, not to mention some of its engineers. However what is more likely is that Google has been playing its cards in Washington much better than Microsoft.  Google backed Obama to win and it is likely that it is calling on a few favours.

It will be interesting to see to what extent that will be.  However of the DoJ kills the deal it will be a little unfair.  Google is far too powerful and two small  competitors are not enough to balance it.