Yahoo-Google Deal Under The Scope

By Jenny Huntington
22:13, September 9th 2008
66 votes
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Yahoo-Google Deal Under The Scope

The search deal between Google and Yahoo is being investigated by former Walt Disney vice chairman and Assistant Attorney General in charge of the Antitrust Division of the United States Department of Justice during the Carter administration Sanford Litvack. The renowned attorney has been asked by the Justice Department to examine current evidence in case the latter resolves to challenge the deal.

In June, the two companies reached an agreement that allows Yahoo to outsource some online advertisements to Google and entails that the revenues will be shared. Yahoo expects to bring in $800 million annually, as a result of this partnership.

In order to give the Justice Department time to look into the matter and make a decision concerning it, Google and Yahoo have voluntarily put the implementation of the deal on hold for a period of three and a half months, beginning June. A statement released by Yahoo informs that the companies are confident that the agreement is lawful. Moreover, federal regulators will surely learn that the deal is good for the marketplace, the statement further reads.

The deal, which is said to have been a way for Yahoo to forestall a takeover attempt by Microsoft Corporation, has raised concern among major advertisers, including Coca-Cola Co., Procter & Gamble Co. and General Motors, who fear that the agreement would allow the two companies to control a whopping 90% of the online search advertising market.

Although a Justice Department spokesperson refused to comment on their decision to seek Litvack’s assistance, regulatory analyst at Stifel Nicolaus Blair Levin stated that the move is likely to indicate that the Department is planning on challenging the partnership.



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