Report: Yahoo-Google partnership under DOJ scrutiny

The US Department of Justice (DOJ) has opened a formal antitrust investigation into the advertising partnership between Yahoo and Google, the Washington Post reported Wednesday.

On June 12, Yahoo said it would run advertisements supplied by Google alongside search query results, a four-year deal estimated to bring Yahoo up to US$800 million in revenue a year.

"We are continuing to have cooperative discussions with the Department of Justice about this arrangement," Google said in a statement. "We are confident that the arrangement is beneficial to competition, but we are not going to discuss the details of the process."

Yahoo did not have a comment. The deal with Google, which already dominates text-based search advertising, was widely characterized as a move by Yahoo to deflect Microsoft's acquisition attempts.

In April, Yahoo and Google informed the DOJ of a planned two-week test of the advertising program, which was limited to US traffic on yahoo.com and comprised no more than 3 percent of total search queries.

After reaching a larger agreement last month, the two companies said they would delay implementing the program for three and a half months pending a voluntary review by the DOJ, the Post reported. But the newspaper characterized the DOJ as now undertaking a formal investigation of the deal.