Justice Dept. Preparing to Challenge Google-Yahoo Ad Deal

Authored by Mark Hefflinger on September 9, 2008 - 7:06am.

Washington - The Justice Department is gearing up to mount a significant challenge to Google's (NASD: GOOG) planned search-advertising deal with Yahoo (NASD: YHOO), The Wall Street Journal reported on Tuesday. The department reportedly has hired Sanford Litvack, the former vice chairman of Disney, to examine the evidence and build a case against the potential deal.

The news comes after the Association of National Advertisers (ANA), a trade group of more than 400 companies, warned in a letter to the Justice Department that such a partnership would "control 90% of search advertising inventory" and "likely diminish competition, increase concentration of market power, limit choices currently available and potentially raise prices to advertisers."

Google was quick to defend the proposed deal, which would see it supply ads on Yahoo search pages.

"While there has been a lot of speculation about this agreement's potential impact on advertisers or ad prices, we think it would be premature for regulators to halt the agreement before we implement it and everyone can judge the actual impact," the company said in a statement.

http://snipurl.com/3omzg (DMW previous coverage)