Search Biz: MSFT Spends On Lobbyists To Save On Yahoo; Google Book Deal Gets Tentative OK; WSJ Says ‘Extinction’ Threatens Yellow Pages & More

By almost doubling its spending on lobbying, Microsoft managed to kill the Google-Yahoo ad deal and may also have saved itself millions of dollars on a Yahoo buyout. That’s the case made by Declan McCullough today on CNET. McCullough explains that Microsoft spent about $12-$14 million per year on lobbyists between 2005 and 2007, but so far in 2008 that figure has soared to almost $25 million.

And if the new Yahoo CEO goes back to the negotiation table with Microsoft, that could save MSFT a lot of money:

In return for millions of dollars distributed to Washington insiders, Microsoft could save billions on an eventual Yahoo purchase. Yahoo shares closed at $28.38 on February 1, the day the bid was announced, and at $10.63 on Monday. Even taking into account the market’s overall fall in share prices, Microsoft may save billions by shoving Yahoo into a corner and eliminating its options.

A Federal judge has given tentative approval to the recent Google book search lawsuit settlement. That’s the deal where Google agreed to pay $125 million to settle two publisher lawsuits over Google’s scanning of copyrighted books. The judge set a June date for a final hearing to decide on the settlement.

The ongoing saga over the economic slowdown and its impact on search industry ad revenues continues with some restrained comments from Google CEO Eric Schmidt. He’s quoted on MarketWatch today, saying “everyone is worried about revenue,” but didn’t go into any specifics about Google’s ad revenue expectations.

Ouch: The Wall Street Journal is using the word “extinction” in a headline about yellow pages publishers. The Journal says small business ad spending is drying up in the current economy, and cites a few downbeat forecasts from industry watchers: print and online yellow pages ad spending will fall 6.3% next year (Wachovia analyst) and ad spending in print directories will plummet 39% in the next four years (Borrell Associates). My SEL colleague Greg Sterling points out that yellow pages growth is online, but revenues are offline still. (Interesting comments on Greg’s blog post, too.)

And finally, ConsumerAffairs.com reports that the state of Washington is suing an SEO company, Visible.net, for a variety of alleged infractions: misrepresenting the ability to increase web site traffic by achieving top search engine rankings, failing to provide refunds or honor cancellation requests, claiming that customer service reps can be reached at any time when, in fact, customers are often unable to reach reps and sometimes don’t get return calls, and more. According to the Washington Attorney General’s office, they and the Better Business Bureau have received almost 90 complaints about the defendants since 2005.