Litvack hire fuels speculation of Google-Yahoo scrutiny

The Justice Department’s hiring of prominent lawyer Sandy Litvack to reportedly assist its probe of the advertising tie-up between search-engine giants Google Inc. and Yahoo! Inc. is fueling speculation that the transaction could be challenged by the Bush administration.
The Google-Yahoo deal has implications for wireless carriers insofar as choice and deployment of search engines for handsets.
Litvack headed DoJ’s antitrust division in the Carter administration and served as a Walt Disney Co. executive. Most recently, he was a partner at the law firm of Hogan & Hartson.
“Since we announced this business arrangement to strengthen our ability to compete in the market –including fiercely competing with Google — there has been rampant speculation about the deal. Throughout the voluntary 100-day review period, we have had a constant and productive dialogue with the Justice Department. It would be premature to suggest anything as this deal has yet to be implemented,” said Yahoo in a statement. “We have been informed that the Justice Department, as they sometimes do, is seeking advice from an outside consultant, but that we should read nothing into that fact. We remain confident that the deal is lawful and that when the federal and state regulators with whom we have been working see it in action, they will find it to be pro-competitive and good for the marketplace.”
Google said the Internet search-advertising venture should not prompt a rush to judgment by the Justice Department.
“We voluntarily delayed implementation of this arrangement to give the Department of Justice time to understand it, and we continue to work cooperatively with them,” said Adam Kovacevich, a Google spokesman. “While there has been a lot of speculation about this agreement’s potential impact on advertisers or ad prices, we think it would be premature for regulators to halt the agreement before we implement it and everyone can judge the actual impact. We are confident that the arrangement is beneficial to competition, but we are not going to discuss the details of the regulatory process.”
Analysts at Stifel, Nicolaus & Co. Inc. observed that the “hiring of a lawyer with this kind of background is far more rare, and, in our memory, the times when this has happened the department brought a case.”