UPDATE 2-Rakuten seeks probe of Yahoo Japan-Google tie-up

* Rakuten has asked anti-monopoly watchdog for probe

* Yahoo Japan says earlier got greenlight from watchdog

* Yahoo Japan drops 2.7 pct, underperforming broader market
(Recasts with company confirmation)

By Nobuhiro Kubo

TOKYO, Oct 20 (BestGrowthStock) – Online retailer Rakuten Inc
(4755.OS: ) has petitioned Japan’s antimonoply watchdog to probe a
planned search engine tie-up between Yahoo Japan Corp (4689.T: )
and Google Inc (Read more about Google Stock Analysis) (GOOG.O: ), a move that could delay the alliance.

Yahoo Japan, the nation’s top Internet portal, plans to adopt
Google’s search engine by the end of the year, and the two would
then control almost all of the domestic search market — a scheme
that has also drawn criticism from Microsoft (MSFT.O: ).

Analysts said, however, that they do not expect the deal to
be scuttled, although Japan’s Fair Trade Commission must conduct
a review if there is a formal petition.

“I don’t think this is big news. Microsoft has already
expressed concerns, but we haven’t seen any impact on the process
of the deal so far,” said Masato Araki, an analyst at Mitsubishi
UFJ Morgan Stanley.

Yahoo Japan has said it has confirmed with the commission
that the partnership would not violate antitrust regulations.

Shares in Yahoo Japan slid 2.7 percent to 28,690 yen,
underperforming a 1.8 percent drop in the broader market.

Rakuten said the tie-up would hamper growth in Japan’s
Internet industry. Rakuten competes with Yahoo Japan in several
areas including online shopping.

“We want the FTC to fully review the deal,” said company
spokesman Naoki Mizushima.

The Fair Trade Commission, which receives 10,000 petitions a
year, declined to comment.

Yahoo Japan announced its surprise move to switch to Google
in July, declining to follow Yahoo Inc (YHOO.O: ) in choosing
Microsoft’s search engine technology.

It said at the time that it had concluded after a thorough
investigation that Microsoft’s search technology was not strong
enough for its needs, citing Japanese language search
capabilities as one example.

A spokesman at Microsoft’s Japan unit said the firm had
reported their concerns to the watchdog, but declined to say
whether they had formally submitted a petition.

Shares of Rakuten were down 0.7 percent at 60,800 yen.
(Additional reporting by Soham Chatterjee in Bangalore; Editing
by Edwina Gibbs)

UPDATE 2-Rakuten seeks probe of Yahoo Japan-Google tie-up