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The US Justice Department, which has aggressively gone after online gambling establishments over the past two years, has yet another big target in mind....the biggest of all perhaps - Google!
The Wall Street Journal reports that The Justice Department has quietly hired one of the nation's best-known litigators, former Walt Disney Co. vice chairman Sanford Litvack, for a possible antitrust challenge to Google Inc.'s growing power in advertising.
Mr. Litvack's hiring is the strongest signal yet that the U.S. is preparing to take court action against Google and its search-advertising deal with Yahoo Inc. The two companies combined would account for more than 80% of U.S. online-search ads.
News of this development sent Google stocks down .5%, or $24.30, to $419.95 in 4 p.m. trading on the Nasdaq Stock Market.
The Wall Street Journal also reported that US lawyers have been deposing witnesses and issuing subpoenas for documents to support a challenge to the deal, lawyers close to the review said. Such efforts don't always mean a case will be brought, however.
It isn't clear whether a U.S. challenge would target the Google-Yahoo deal alone or take on broader aspects of Google's conduct in the growing online-advertising business. The agreement with Yahoo, announced in June, gives Google, of Mountain View, Calif., the right to sell search and text ads on Yahoo sites, sharing revenue with Yahoo, which is based in Sunnyvale, Calif.
Google said that its advertising deal with Yahoo does not violate anti-trust laws. They contend that the relationship fosters competition.
The Wall Street Journal reported Monday that a group of major advertisers complained to the department about the deal. The Association of National Advertisers, which represents major advertisers such as Procter & Gamble Co. and General Motors Corp., warned that the deal could lead to higher prices and limited opportunities for Web advertisers.
