Search Engine Optimization News Blog

Google and Yahoo had expected some attention from the anti-trust posse, but it seems that the interest is running a little deeper than would be assumed.

The two mega companies had signed an advertising deal last month, and voluntarily agreed to hold off on implementation until a review could be completed.

The Justice Department instead opened a formal investigation this week, and has already expressed its intention of delving deeper into the affairs of the internet giants than most expected.

“They don’t do it without having identified significant issues,” said M.J. Moltenbrey, a lawyer and former director of civil non-merger enforcement in the Justice Department’s antitrust division. “It involves approval at higher levels within the antitrust division.”

Anonymous sources say the investigators plan to demand documents not only from Google and Yahoo, but also from other large companies in the Internet and media industries.

“It doesn’t mean they have drawn any conclusions,” said Peter Guryan, a former antitrust lawyer in the Justice Department. But “it is a significant step beyond a request for voluntary information … and it demonstrates that the DOJ clearly has questions.”

Yahoo says there is nothing out of the ordinary: “There is nothing unexpected in the review of this arrangement as structured by the parties and Department of Justice officials,” and Google is professing unconcern: “We do feel that it is a pro-competitive deal.”

However, the fact that other entities are being consulted is giving rise to wild speculation.

Microsoft, when asked if documents have been requested from them, declined to comment, and many are concerned that Google will now have a lock on the advertising market.

The main question is whether or not Yahoo still has the incentive to compete against its larger rival. WITH Google handling a large chunk of Yahoo’s search based advertising, does the smaller company still have the reasons to be competitive?

Other corporations in other countries have managed to walk that fine line between cooperation and competition, and Google claims that the advertising deal makes matters better, not worse, and that consumers will be the primary beneficiaries in the end.

Google’s manner of determining the highest relevance of ads to be shown during search is considered to be superior, and Yahoo is attempting to take advantage of that to increase revenue. Yahoo’s anticipated income from the venture is expected to reach $800 million a year.