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U.S., European regulators approve Microsoft-Yahoo partnership

Friday, February 19, 2010; A13

TECHNOLOGY

Microsoft-Yahoo partnership approved

Microsoft's efforts to compete online against search engine leader Google took a major step forward as U.S. and European regulators cleared the software company's 10-year search partnership with Yahoo.

The deal means Microsoft's Bing becomes the search engine for Microsoft and Yahoo sites, while Yahoo will focus on attracting big advertisers. Microsoft will handle the automated auction of search ads for use on both companies' sites and pay Yahoo a portion of search ad sales generated on Yahoo pages.

Microsoft is hoping that by making itself a single conduit for advertisers to access customers on both sites, it will become a credible alternative to Google.

"Microsoft really has room to throw money at this," said Kim Caughey, senior analyst at Fort Pitt Capital Group. "I think it can work. If they can make inroads in specific target areas, they could have something positive to report."

Microsoft has already made some progress with its search engine, Bing, picking up 3.3 points of market share since its launch last June. But Bing is not likely to "push Google off a very big pedestal any time soon," said Caughey.

-- Reuters

INCOME

For top earners, income rises, tax rates fall

The 400 highest-earning U.S. households reported an average of $345 million in income in 2007, up 31 percent from a year earlier, IRS statistics show. The average tax rate for the households fell to 16.6 percent, the lowest since the agency began tracking the data in 1992.

The figures for 2007, the last year of an economic expansion, show that the average income reported by the top 400 earners more than doubled from $131.1 million in 2001. That year, Congress adopted tax cuts urged by President George W. Bush that Democrats say disproportionately benefit the wealthy.

The top 400 paid $23 billion in taxes in 2007, up from $18 billion a year earlier and a bigger amount than in any year since 1992. Their average effective tax rate was about half the 29.4 percent in 1993, the first year of President Bill Clinton's administration, when taxes were increased. The top 400 earners reported an average of $46 million of income that year.

-- Bloomberg News

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