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TheStreet Open House

Report: Justice Probes Yahoo!-Google Deal

SAN FRANCISCO - The Justice Department has reportedly hired a top attorney to look more closely into a search deal between Yahoo! (YHOO) and Google (GOOG).

The two companies in June had voluntarily agreed to put the search deal on hold for three and a half months in order to give the Justice Department time to scrutinize it. And the Justice Department is apparently doing just that by hiring former Walt Disney vice chairman Sanford Litvack, according to the Wall Street Journal.

Litvack, who served as an antitrust chief under President Jimmy Carter, is supposedly examining evidence collected so far on the deal in preparation for a challenge if the Justice Department decides to move forward with one, according to the Journal.

Google on Tuesday issued a statement in response to the report.

"We voluntarily delayed implementation of this arrangement to give the Department of Justice time to understand it, and we continue to work cooperatively with them," the company said.

"While there has been a lot of speculation about this agreement's potential impact on advertisers or ad prices, we think it would be premature for regulators to halt the agreement before we implement it and everyone can judge the actual impact.

"We are confident that the arrangement is beneficial to competition, but we are not going to discuss the details of the regulatory process."

Yahoo! also put out a statement defending the search deal: "We have been informed that the Justice Department, as they sometimes do, is seeking advice from an outside consultant, but that we should read nothing into that fact. We remain confident that the deal is lawful and that when the federal and state regulators with whom we have been working see it in action, they will find it to be pro-competitive and good for the marketplace."

Google's Chief Executive Eric Schmidt told Bloomberg television late last month that the company planned to move ahead with the search deal in early October even if it hadn't received regulatory approval by then.

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