Tuesday, October 14, 2008

Google/Yahoo Talking to Justice Dept. About Settlement of Antitrust Issues

Google Inc. and Yahoo Inc. are in talks with the Justice Department in an effort to head off an antitrust challenge to their proposed advertising agreement. The settlement negotiations are at an early stage and it isn't clear whether they will resolve U.S. objections or be acceptable to the two companies, lawyers close to the effort said. At the same time, investigators are continuing to build a lawsuit to block the deal, worried it would give Google too much power in online advertising. Major advertisers have raised objections to the Google-Yahoo deal, which would align the two largest players in Internet ads. Advertisers have told Justice Department officials that the partnership will limit competition, raise prices and reduce choices. In the settlement talks with the government, both companies have discussed concessions. These include capping the volume of Google ads Yahoo would use, assurances that Yahoo would continue to compete in search ads, and a reporting mechanism to ensure compliance, people close to the talks said. U.S. officials hope to impose measures that will ensure that prices advertisers must pay don't rise significantly after the deal.

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