MSFT-YHOO: Ballmer Cosies To EC Regulators, Yahoo May Outsource Search Ads: Reports

This speculative story notes the European Commission’s recent antitrust cases against Microsoft (NSDQ: MSFT) could be a hurdle to MS’ Yahoo (NSDQ: YHOO) bid. Some meat on the bone – says an unnamed former EC competition official: “If Microsoft bundled search and advertisement facilities into the Windows operating system, this would certainly be a concern.” But ad publishing facilities bundled in the OS are unlikely; they’re not a mainstream consumer feature. And anyway, without Yahoo having agreed to the proposal, there’s no application coming across the EC’s desk any time soon.

More revealing: Following recent antitrust rulings, MS CEO Steve Ballmer has been having “nearly daily telephone conversations” with EC competition commissioner Neelie Kroes – the same Kroes who fined him £340 million in September and promised: “Microsoft can now expect to face further intense probing by the Commission.”

All this happens against the backdrop not just of a new case interrogating MS’ Internet Explorer bundling but of the EC’s ongoing analysis of Google’s (NSDQ: GOOG) proposed DoubleClick acquisition. Sidenote: Kroes in 1996 handed Bill Gates an honourary degree from Nijenrode University in her native Holland.

Meanwhile, WSJ says: “Yahoo already had been in negotiations in recent weeks to outsource its web-search advertising in Europe to Google, say people familiar with the matter.” Microsoft this morning said it now has 92.6 percent of Norwegian enterprise search provider Fast, which it bid for last month (via Reuters).