RealTime IT News

U.S. Presses Ahead on Google-Yahoo Deal Review

Google-Yahoo
The U.S. Justice Department is seeking documents from Google and Yahoo as part of its formal antitrust investigation into the two search leaders' advertising revenue-sharing deal, the Washington Post reported on Wednesday.

InternetNews.com reported last month that a week after the two companies announced the deal on June 12, the Justice Department had begun an official review of the agreement.

In their investigation, antitrust officials plan to demand documents not only from Google (NASDAQ: GOOG) and Yahoo (NASDAQ: YHOO), but also from other large companies in the Internet and media industries, the Post reported, citing sources who spoke on condition of anonymity.

Archrivals Google, with more than 60 percent of the Web search market, and Yahoo, with 16.6 percent, agreed last month on an advertising partnership under which Yahoo will let Google put search ads on its site. Yahoo called the deal an $800 million annual revenue opportunity.

Google and Yahoo are ranked first and second in search respectively.

At the time they announced their agreement, Google and Yahoo also said they would voluntarily hold off for several months on actually implementing the deal, giving antitrust regulators time to look over it.

They added that because the agreement was not a merger, it did not require regulatory approval. However, the government could challenge the arrangement in court if it concluded that it would restrain competition between them.

The level of investigation being undertaken by the Justice Department signals that it may have found some cause for concern, the Washington Post said.

Lawyers familiar with similar investigations said that the kind of legal requests being issued by the Justice Department in this case -- "civil investigative demands" -- are not used for routine matters, the newspaper also said.

Yahoo expressed confidence that the deal would be good for competition, the article said.

"There is nothing unexpected in the review of this arrangement as structured by the parties and Department of Justice officials," Yahoo said in a statement, the Post reported.

A Google spokesman reiterated that the company had voluntarily delayed implementing the deal for three and a half months to give the Justice Department time to understand the agreement.

"We are confident that the arrangement is beneficial to competition, but we are not going to discuss the details of the process," Google spokesman Adam Kovacevich said in an e-mail to Reuters.