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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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