Ad partnership on hold for antitrust probe

Google and Yahoo have agreed to briefly delay their search ad partnership while the Justice Dept. completes its antitrust review.

The Netcos had planned to begin implementing the partnership, brokered in June, this month, but the feds haven’t completed their review. Indeed, they recently brought in former Mouse House vice chair Sandy Litvack to investigate the deal. Litvack had been Justice’s antitrust chief under President Jimmy Carter.

The deal calls for Yahoo to outsource certain ads to Google, the online search giant, and some advertisers fear it will result in higher prices.

Google and Yahoo, meanwhile, have argued that it will improve the consumer experience.

The pact was brokered in the wake of Microsoft’s withdrawn takeover bid for Yahoo. At the time, Microsoft had changed course to try and buy Yahoo’s search biz, but Yahoo wasn’t interested in such an arrangement.

Since then, Google’s share of the Web search market has widened to 63% as of August, according to Internet tracking firm comScore. Yahoo dropped to 19.6% and Microsoft slipped to 8.3%.

Yahoo and Google both characterized the delay as a brief one. “We have had discussions with regulators and look forward to responding to their questions about this agreement,” Yahoo said in a statement.

Google said the company is still in conversation with the Justice Dept. about the pact and agreed to delay implementation “while those discussions continue.” Yahoo has forecast the deal would bring an additional $800 million in annual revenues into its coffers.

(Wire services contributed to this report.)

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