Feds turn up heat on Google/Yahoo deal

The DoJ may try to block Google's deal with Yahoo

The US Department of Justice may be looking to challenge Google's proposed advertising revenue deal with Yahoo.

Reports in The Wall Street Journal suggest that the DoJ is preparing to hire attorney Sandy Litvack to examine the case.

Litvack was previously a board member of HP and Compaq, and was also an assistant attorney general in the DoJ's antitrust division.

If true, the report could indicate that the government is preparing to challenge the deal in which Google would take a major share of Yahoo's search ad business.

The two companies signed the advertising deal in June, which could generate as much as $800m in new revenues for Yahoo. At the time, the company was struggling to fend off a takeover bid from Microsoft.

Ultimately, the deal was cited by Microsoft as a major reason for giving up its pursuit of Yahoo, but the Redmond giant also used the deal to push for a new antitrust case against Google.

Microsoft is not the only party to express concern over the Google/Yahoo deal. Earlier this week, the US Association of National Advertisers lobbied the DoJ to take a closer look at the deal.

Meanwhile, Yahoo stock has dropped to its lowest level in years and the company's board of directors is still fighting to convince a largely sceptical group of investors that turning down Microsoft's offer was the correct move.