Google-Yahoo! Deal Hits Snag in Europe

SAN FRANCISCO -- A search deal between Yahoo!(YHOO Quote) and Google(GOOG Quote) now faces the scrutiny of European regulators, casting new doubt on its prospects.

The European Union is known for its tough anti-trust stance, which has resulted in fines against Microsoft(MSFT Quote) in the past. If regulators decide to formally challenge the Yahoo!-Google deal, that could result in a delay of up to a year, or even a collapse of the search deal altogether.

On Tuesday, Google issued a statement in response to the European Union's probe: "The agreement is limited in scope to Yahoo's U.S. and Canadian websites, and it will not have any significant effect on Europe. We are of course co-operating with the Commission and are confident that they will reach the same conclusion." ...