Congress, States Question Google, Yahoo Ad Alliance

Google's proposed search advertising partnership with Yahoo, already the subject of much scrutiny, faced additional examination on Capitol Hill yesterday during separate House and Senate hearings on Internet competition. Lawmakers questioned executives from Google, Yahoo and Microsoft -- the biggest players in online marketing -- about how deals between the companies would impact consumers and advertisers. The hearings were prompted by an announcement last month that Google would provide some search advertising for Yahoo. Google is the top Internet company and, its critics say, could control Internet advertising if its deal with Yahoo is permitted. Under the deal, Google would provide search advertising to run with some Yahoo searches in the United States and Canada. Yahoo is estimated to get as much as $800 million annually from the deal. The Justice Department is investigating whether a partnership between Google and Yahoo could lead to a monopoly. Several states also have opened antitrust reviews of the deal. Search advertising, referring to the ads that run beside the search results provided by Google, Yahoo and Microsoft, make up one of the largest chunks of Internet advertising. Google is the No. 1 search engine, with Yahoo and Microsoft running a distant second and third. Several state attorneys general have started their own examination of Google's deal to supply search ads to Yahoo even as a congressional committee in the Senate and House hold hearings tomorrow to examine the potential antitrust implications of the deal. Spokesmen for state attorneys general in Connecticut and Florida confirmed today the examinations are under way, though in Florida the examination appears to be preliminary. The Washington Post over the weekend reported that up to a dozen states are looking at the Google-Yahoo ad deal.