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Microsoft-Yahoo deal not good for consumers

Deal will reduce number of players in the market

The head of search and user experience at Google has slammed the deal between Microsoft and Yahoo, claiming it will be negative for competition and for consumers.

Marissa Mayer, Google's vice president of search and user experience, said if Yahoo adopts Microsoft's Bing search engine in place of its own, it will reduce the search market from three major players to two. She said several groups at Google were still studying the proposed partnership, which is expected to close next year, but that it might reduce innovation.

"Everyone runs faster in a race where there are more people," Mayer said.

The likely effects of the deal are being debated in various corners of the industry. Some observers have suggested it may increase competition in the online advertising market, by creating a more viable competitor to Google.

When it comes to search, however, an industry analyst shared Mayer's concern.

It's "unfortunate" that there will now be one fewer major search player because it will weaken the competitive landscape, IDC analyst Al Hilwa said.

In their quest to catch up with Google, both Yahoo and Microsoft were doing interesting and innovative things in search, he said. "That has been good for the industry," Hilwa said. With this deal, Microsoft is likely to feel less urgency to innovate and "move the needle," he said.

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See also: Bing was tipping point in Microsoft-Yahoo deal


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