Department of Justice Hires Litvack in Google-Yahoo Case

The DoJ is taking the anti-Google (GOOG) ad pact seriously.

Reuters is reporting that the Department of Justice has hired top antitrust lawyer Sandy Litvack to consult on its investigation of the deal between the two Web titans.

The appointment of Litvack, who was the Justice Department's chief antitrust lawyer under President Jimmy Carter, as well as vice-chairman of Walt Disney Co., suggests that the feds are ramping up their case against the Yahoo/Google pact.

In April, Yahoo (YHOO) and Google began experimenting with the deal, which would allow Google -- the Web search leader -- to begin to serve ads on sites run by Yahoo, the number two search company. For months, both companies have insisted that the deal is not anticompetitive and expressed confidence that it would ultimately pass regulatory scrutiny. The companies stuck to their guns late Monday.

"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," Yahoo said in a statement. For its part, Google issued a statment saying, "We think it would be premature for regulators to halt the agreement before we implement it and everyone can judge the actual impact."

Yahoo estimates that the deal could pump an additional revenue of $800 million into its coffers.

Microsoft (MSFT), the number three Web search company, opposes any deal betwen Google and Yahoo, arguing that it would make the Web ad market less competitive. The Justice Department may be preparing to make that very same case.

Comments

[wiseguy001:]

If this YHOO/GOOG ad deal gets beaten down by Gov on antitrust grounds, and it will, YANG, Decker, BOST.DICK et al should all be unceremoniusly fired as yet again, they will have mande ANOTHER STRATEGIC BLUNDER that will not have delivered on its promise. How does any major investor tolerate such stupidity not to mention tens of BILLIONS of $s of market cap being wiped out by these IDIOTS?! Bill Miller, chief investment officer of Legg Mason Capital Management, who supported the current board and management should be hung at the square by other investors and his own company!

2008 Sep 09 10:59 AM