• The New York Times, Thursday, May 22, 2008 11:15 AM

The New York Times wonders how Google, the Web's dominant search player, could dispute that adding Yahoo, the No. 2 player, as a search marketing client would be against antitrust regulations. The proposed partnership would see Yahoo using the search king's sophisticated advertising technology to drum up better returns from a portion of its search results in exchange for giving Google a small cut of advertising revenues. Some analysts estimate that such a partnership would bring Yahoo an additional $1 billion a year in cash. Many of the same analysts also believe the proposed deal invites regulatory scrutiny.

"Up to now, Google has been very careful to avoid predatory behavior," said Christine A. Varney, a partner at the law firm Hogan & Hartson and a former member of the Federal Trade Commission. "But a transaction like this, I think, is fundamentally anticompetitive."

Of course, the Google camp said it's no different than the supplier arrangements in the markets for computer printers, appliances and cell phone service. For example, Canon supplies printer engines to about 80 percent of the laser printer market, including longtime rival HP. AT&T licenses its mobile network to Virgin Mobile USA and many other small carriers, and Toyota creates hybrid engines that are bought by General Motors.

Read the whole story at The New York Times »