Summary:

They gave the Department Of Justice three and a half months to review their ad deal – and it’s now doing just that in earnest. An unnamed so…

They gave the Department Of Justice three and a half months to review their ad deal – and it’s now doing just that in earnest. An unnamed source tells Washington Post the DOJ is not just looking over the Yahoo-Google (NSDQ: GOOG) partnership but has begun a formal investigation and will request documents not just from the pair but also from other online media players – a move that may please Microsoft.

Is that serious? Lawyers and Yahoo (NSDQ: YHOO) are split on the point. WaPo quotes some of the former: “They don’t do it without having identified significant issues”, “it is a significant step beyond a request for voluntary information,” But a Yahoo spokesperson told the paper: “There is nothing unexpected in the review of this arrangement as structured by the parties and Department of Justice officials.”

Yahoo said on June 12 it is “not required to receive regulatory approval” for the deal to take Google ad inventory on some of its searches. But the DOJ’s interest may be piqued by the fact Google and Yahoo are the number one and two web ad suppliers. That may sound like a market dominance issue but here’s the industry mailaise – Yahoo’s second place, like that of all Google’s followers, is distant. It would be bitterly ironic for it if, in an attempt to catch up and stay independent, it was penalized on competition grounds.

The ad deal applies only to the US and Canada, and the Europe’s competition commissioner’s office told me today Yahoo and Google had not notified it of the deal.

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