Google, Yahoo! Seek to Avoid Ad Deal Suit

Google ( GOOG) and Yahoo! ( YHOO) are in talks with the Justice Department in an effort to head off an antitrust challenge to their proposed advertising agreement, according to a published report.

The negotiations are at an early stage and it isn't clear whether they will resolve government objections or be acceptable to the two companies, lawyers close to the situation said, the Wall Street Journal reports.

Investigators also continue to build a lawsuit to block the deal, worried it would give Google too much power in online advertising. And advertisers have raised objections to the Google-Yahoo! deal, which would align the two largest players in Internet advertising.

Under the deal, Yahoo! would be able to place on its Web site certain search ads sold by Google, bringing Yahoo! hundreds of millions of dollars in new revenue in its first year, according to the newspaper.

In the settlement talks with the government, the companies have discussed capping the number of Google ads Yahoo! would use, assurances that Yahoo! would continue to compete in search ads, and a reporting mechanism to ensure compliance, the Journal reports, citing people close to the talks.

Google and Yahoo! declined to comment on a possible settlement, the Journal reports. The companies have said they believe the deal as currently structured is pro-competitive and good for consumers.

This article was written by a staff member of TheStreet.com.

More from Technology

It's Not Over Yet: Keep an Eye on FANG Stocks

It's Not Over Yet: Keep an Eye on FANG Stocks

Apple Buys Tesla? Amazon Buys Sears? 3 Dream Mergers That Just Make Sense

Apple Buys Tesla? Amazon Buys Sears? 3 Dream Mergers That Just Make Sense

Computer Chip Stocks Tumble on China Trade War Fears

Computer Chip Stocks Tumble on China Trade War Fears

FANG Stocks Get Swept Up in Broader Market Selloff

FANG Stocks Get Swept Up in Broader Market Selloff

Dropbox Is the New Defensive Stock to Own With the Market Falling Apart

Dropbox Is the New Defensive Stock to Own With the Market Falling Apart