US lawmakers look into Yahoo-Google ad pact

The US Congress waded into the escalating fight over the future of Yahoo, demanding to know whether the internet company's advertising partnership with Google, intended to keep Yahoo out of the clutches of Microsoft, raises antitrust concerns, an Associated Press report said.

Testifying before the Senate and House Judiciary Committees, executives from the three companies painted very different pictures of an agreement that will allow Google to sell some of the ads displayed alongside search results on Yahoo's web site.

While Microsoft said the deal would limit competition and raise prices in the online advertising market, Yahoo and Google insisted it would benefit consumers and advertisers, the Associated Press report added.

The stakes are high for Yahoo. It has embraced the partnership with its rival Google as an alternative to an acquisition offer from Microsoft.

Yahoo and Google say Congress has little power to actually stop the arrangement, but lawmakers can use the bully pulpit to raise concerns about the deal, the report further said.

Indeed, some of them turned up the heat Tuesday by asking whether the Google partnership will further weaken Yahoo and cement Google's dominance in the online advertising business.

House Judiciary Chairman John Conyers, D-Mich., asked whether the partnership would be more anticompetitive than a Microsoft purchase of Yahoo. And Herb Kohl, D-Wis., chairman of the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, said Congress needs to explore 'whether this agreement will reduce Yahoo to nothing more than the newest satellite in the Google orbit.'

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