It looks like it won't be long until the Justice Department notifies Google Inc. [
] and Yahoo! Inc. [
] of a potential legal challenge over the companies' proposed search advertising partnership.
Lawyers for the two companies submitted a final proposal to DOJ antitrust lawyers
Monday, cutting back the terms of the agreement to two years and
limiting Yahoo!'s take from the partnership to 25% of its total
search-ad revenue. A lawyer involved in the review, however, said the
companies fear DOJ is so vehemently opposed to any agreement that the
watered-down version would still face an agency legal challenge. The
original deal proposed a 10-year term with a higher revenue stream
targeted to aid Yahoo! as it sought ways to fight off Microsoft Corp.'s [MSFT] hostile takeover back in February.
A
decision on the Google-Yahoo! matter will likely come soon because
Assistant Attorney General Tom Barnett (pictured) is expected to announce his
resignation within days. The administration had asked officials to
remain until the election, but historically, a deputy fills the slot in
an acting capacity until the inauguration.
DOJ staff has already urged Barnett to
oppose the deal. Barnett has rejected staff advice in several
high-profile mergers, but that's not likely to happen here, according
to sources. Already, Deputy Assistant Attorney General David Meyer has
expressed opposition to the arrangement. One lawyer said Meyer, who is
responsible for antitrust issues in the technology sector, announced
during one meeting that he had a "visceral reaction" against the
agreement. -- Cecile Kohrs Lindell