The Microsoft antitrust trial seems like a distant memory, doesn’t it?

Not quite yet to the Justice Department, it seems, which asked the federal judge overseeing the 2002 settlement with federal and state regulators yesterday to extend her oversight of some of the judgment another 18 months.

The Justice Department said it wants that extended to make sure Microsoft fully complies with the requirement that technical documentation to licensees is crackerjack.

And Microsoft (MSFT) has agreed to be under the watch until May, 2011.

U.S. District Court Judge Colleen Kollar-Kotelly’s oversight of the software giant was supposed to run out this November. She must approve the extension.

Here’s the U.S. Department of Justice’s press release on the issue:

Justice Department Requests Extension of Microsoft Final Judgment

Microsoft Agrees to 18-Month Extension, Subject to Court Approval

WASHINGTON, April 16 /PRNewswire-USNewswire/–The Department of Justice told the U.S. District Court for the District of Columbia today that it is necessary to extend the term of certain portions of the Microsoft final judgment by at least 18 months. The Department said that an extension is necessary to ensure the quality of the technical documentation Microsoft provides to licensees.

The Department’s Antitrust Division made its views known today as part of its Joint Status Report to Judge Colleen Kollar-Kotelly of the U.S. District Court for the District of Columbia. The Antitrust Division enforces the final judgment in conjunction with antitrust enforcers from 17 states and the District of Columbia, which along with Microsoft joined in today’s filing with the court.

In 2006, Microsoft agreed to a two-year extension of the communications protocol licensing program contained in Section III.E of the final judgment, along with all of the final judgment’s enforcement provisions. Microsoft also agreed that the Department and state antitrust enforcement agencies may, at their discretion, apply to the court for an additional extension of all or part of the extended provisions of the final judgment for a period of up to three additional years, through November 2012. The United States is exercising its right under this provision to seek an extension of Section III.E and its supporting provisions through May 12, 2011. Without this action, the final judgment would have expired on Nov. 12, 2009.

Section III.E of the final judgment requires that Microsoft make available to competing server software developers, on reasonable and non-discriminatory terms, certain technology used by Microsoft to make its server operating systems interoperate with client PCs running the Windows operating system. Microsoft must provide licensees with technical documentation that is designed to enable them to use this technology in their own server products so that those products work better with Windows.

In past status reports, the Department reported to the court its concerns with the quality of the technical documentation Microsoft provides to licensees under this program and with the length of time it is taking Microsoft to improve that documentation.

The Department today also submitted the necessary papers to the court for its consideration.

Wrote The Deal’s Cecile Kohrs: “A proposed joint venture between rival Internet companies Google Inc. and Yahoo! Inc. appears headed for the trash bin, just ahead of an expected U.S. Department of Justice challenge to the agreement, lawyers close to the deal said.”

Well, maybe it will die at some point. But, in the words of Juba in the last line of the greatest movie ever (“Gladiator,” of course!): Not yet.

Said Google spokesman Adam Kovacevich: “We are continuing to have cooperative discussions with the Department of Justice about this arrangement and agreed to a brief delay in implementing the agreement while those discussions continue. We are confident that the arrangement is beneficial to competition, but we are not going to discuss the details of the process.”

It was a sentiment underscored by Google CEO Eric Schmidt, who was doing an economic summit with Democratic Presidential candidate Sen. Barack Obama today in Florida and told reporters there when asked about the deal: “We agreed to extend our discussions … with the DOJ.”

Yahoo’s CEO Jerry Yang also said the same during Yahoo’s third-quarter earnings call this afternoon.

In fact, that Google (GOOG) and Yahoo (YHOO) lawyers, along with the Justice Department, are still talking is the strongest indication that there might be some middle ground to be found in the fight over the future of the search advertising business.

After all, Google is not shy about going to court. Among many others, it took on media giant Viacom over YouTube’s copyright issues with all the relish of a lipstick-wearing pit bull.

In fact, I am convinced that the search giant’s corporate mantra is from Travis Bickle in “Taxi Driver”: You talkin’ to me? You talkin’ to me? You talkin’ to me? Then who the hell else are you talking … you talking to me? Well, I’m the only one here.

And Yahoo? Well, Yahoo can never stop talking, as evidenced recently by its never-ending discussions to merge with the Time Warner (TWX) online unit, AOL.

This is an overall corporate characteristic–Yahoo often has the tone of a 1970s encounter group.

Plus, the deal to put some Google search ads on its site is an important fountain of revenue Yahoo desperately needs. For its part, Google wants the deal, mostly to keep Microsoft (MSFT) at bay.

As for the Justice Department, it has one big problem if it does go hot and files a lawsuit against the Yahoogle twins: A little thing I like to call “proof.”

Now I am no legal eagle, but I am told by experts that it is a little hard to prove damage that has not occurred yet if it is seeking an injunction to stop implementation of the partnership.

It’s like the big question in that dumb but watchable Tom Cruise movie, “Minority Report”: Can you arrest someone for a murder they might commit?

Google, with its dominant market share that grows daily, may very well be the scariest company on the planet.

(I think it might indeed be and have written in opposition many times to this partnership of the No. 1 and No. 2 players in the search space, but who am I to say?)

But making a case that it will turn Yahoo into a satellite, raise ad prices and turn into Godzilla, all before it actually happens, is tough.

More to the point, with all the pressure from public interest groups and advertisers who oppose the deal without some checks and balances, along with Microsoft’s relentless lobbying, some accommodation obviously must be made.

Thus, that is going to take more days of jabbering, probably into next week (although it all does have to be settled before the election, when the regulators pressing the case might be out of a job).

After those blabby avenues are exhausted, of course, we might very well see the digital gladiators go at it. Or abandon the field.

But not yet.

Please see this disclosure related to me and Google.

All week, Yahoo’s investors have waited for the other shoe to drop–its much-hyped ad deal with Google (GOOG), in which Yahoo (YHOO) would outsource some of its online search-ad monetization business to the search giant.

But will that deal land with a thud instead?

Today, The Wall Street Journal reports that Google executives “are now divided over whether to pursue a search-advertising deal with Yahoo.”

Actually, that depends what you mean by divided, of course, and which Google execs are on which side.

According to sources BoomTown talked to at Google, while there is a lively debate going on at the Googleplex over the ramifications of such a deal, it is more likely than not that the search giant will cut some kind of limited and carefully crafted deal with Yahoo.

Sources said that the structure of the deal is critical, especially making it non-exclusive, limited and also low-key, given the scrutiny related to antitrust issues such an arrangement between the No. 1 and No. 2 companies in Web search will surely and deservedly bring from government regulators.

Some Google execs are very worried about calling further attention to the company in Washington, D.C., as the behemoth that it has actually become, something another behemoth–Microsoft (MSFT)–would surely love to have happen.

“Perceived concentration can be as bad as real concentration, which is not happening if we do a deal with Yahoo in the right way,” said one exec. “But that might be hard to explain clearly.”

While Google execs think that a properly structured deal will pass muster, they are also worried that it might not be worth the damage to the company’s image that might come with a bruising fight over the issue.

Google is still smarting over the brass-knuckle tactics Microsoft used in D.C. related to its DoubleClick deal, delaying its approval and causing Google a lot of money and time.

Already via that deal, its entry into the spectrum auction and its fight over copyright issues with media giant Viacom (VIA), Washington politicians and regulators can’t help but have the growing perception the Google is perhaps not as bouncy and fun and harmless as the company tries to project.

In truth, Google is still bouncy and fun (see its founders Larry Page and Sergey Brin on exercise balls here).

But harmless? Not so much.

In a previous post, I argued that such a Yahoo-Google hookup is a bad idea for consumers, advertisers and anyone interested in a competitive landscape.

I wrote: “It is bad for advertisers, it is bad for consumers, it is bad for innovation, no matter how well-intentioned Google is.

And no matter how many flashy moves Google and Yahoo make, it is flat-out wrong for one player to so dominate such an important sector.”

In addition, some Google execs worry that since Yahoo is staying in the search business, while also outsourcing to Google, that it could gain valuable information about how Google operates.

That’s a no-no at Google, which has what some in Silicon Valley call a “black box” image. In other words, please don’t pay attention to the man behind the curtain.

The less-grand deal, of course, will not be as good news for Yahoo shareholders, since it will not bring in the billion-dollar baby in terms of increased cash flow that some analysts had been bandying about.

And Yahoo is under pressure to come up with a lot of hits now that Microsoft has walked away–for now, at least. Now, it must go it alone, but much damaged by the takeover effort.

During the heat of the deal, such a link-up was seen as a coup for Google, which always likes to stick it to Microsoft.

And it was also seen as a way for Yahoo to better monetize its search business, especially since its own efforts have been so lagging behind Google in size, scope and yield.

And, more importantly, it gave Yahoo an effective weapon in fending off Microsoft’s unsolicited takeover bid.

Well, it worked, it seems, as the talks between Google and Yahoo were the bone that stuck in the throat of Microsoft CEO Steve Ballmer, much mentioned in his kiss-off letter to Yahoo last weekend.

Ballmer wrote, in part: “We regard with particular concern your apparent planning to respond to a ‘hostile’ bid by pursuing a new arrangement that would involve or lead to the outsourcing to Google of key paid Internet search terms offered by Yahoo today. In our view, such an arrangement with the dominant search provider would make an acquisition of Yahoo undesirable to us for a number of reasons.”

I doubt the aggressive Ballmer will let such a deal pass without a lot of heckling and, of course, much, much worse.

Please see this disclosure related to me and Google. ]]> http://kara.allthingsd.com/20080508/googles-chilly-feet/feed/ 0