Google-Yahoo ad deal delayed

Google and Yahoo have agreed to delay launching their search advertising partnership to give the Justice Department more time to investigate its antitrust implications.  

"The companies have agreed to a brief delay in implementing this agreement to continue our ongoing discussions with the Department of Justice," Yahoo said. "We have had discussions with regulators and look forward to responding to their questions about this agreement."

The Justice Department could place restrictions on the companies, block the deal altogether or let it proceed without objection. There is little doubt, though, that the transaction is being carefully reviewed. Last month, the department hired Sandy Litvack, a veteran antitrust lawyer, to help assess the evidence gathered by its lawyers.

Several major advertising groups and agencies have opposed the deal, saying it would add to Google's dominance of the search advertising market, and could lead to higher prices. The advertising partnership also has attracted attention and concern in Congress, and a call for close and continual scrutiny.

"Recognizing the nascent and fast-changing nature of this marketplace, we encourage the department to continue to monitor the state of competition in this industry, whatever the outcome of its current investigation," wrote Sen. Herb Kohl (D-WI) in a letter to the Justice Department. "If, over time, you determine that Google is gaining a dominant market position as a result of the Google-Yahoo agreement, then we would encourage the Justice Department to intervene to protect competition."

Google and Yahoo announced a non-exclusive advertising deal in June that allows Google to run ads alongside Yahoo search results. Both companies have defended the arrangement as beneficial to advertisers.

For more on this deal:
- check out the New York Times article [1]
- also see this InformationWeek article [2]