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Brin: Google-Yahoo Deal Could Meet Regulatory Approval

Google believes it could arrange a search partnership with Yahoo that would pass regulatory scrutiny, co-founder Sergey Brin said at the company's annual shareholder meeting at its Mountain View, Calif headquarters. Last month, the companies ran a two-week test in which Google placed ads on Yahoo's search engine. Google CEO Eric Schmidt said the test went favorably and that the companies-one-time enemies-were now "very friendly."

Meanwhile, the U.S. Justice Department is reviewing that test, and the Senate Judiciary Committee would review any formal partnership between Google and Yahoo, said Chairman Herb Kohl, a Wisconsin Democrat. In his now-famous letter to Yahoo, in which Microsoft walked away from negotiations to acquire the Web company, Microsoft CEO Steve Ballmer said a Yahoo-Google partnership would hurt competition and choice in the online advertising market. He added that such a deal would effectively let Google set prices for search terms.

Analysts agree. "It would simply look like Google is acquiring additional market share," Rob Enderle, president of The Enderle Group told Bloomberg News. He said the move would cause the Justice Department to examine Google more closely in the future, he said. ''That's one of the rocks in Google's road going forward.''

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