advertising partnership

U.S. antitrust regulators are taking a closer look at Google Inc.'s proposed $750 million purchase of mobile phone marketer AdMob, the latest sign of greater government vigilance as Google tries to expand its advertising empire.

The Federal Trade Commission sought more information about the deal this week, according to a Wednesday post on Google's blog.

This so-called "second request" doesn't mean regulators intend to block Google's AdMob deal. Most other acquisitions that go through this stage end up getting approved.

Facebook turned five years old this week, but its celebration is clouded by controversy about how much the Internet site is really worth. The conclusion: The popular social-networking site isn't worth anywhere near $15 billion.

In October 2007, when Microsoft invested $240 million to gain a 1.6 percent stake in Facebook as part of an advertising partnership, some analysts equated that to a near $15 billion valuation. Most of the market was skeptical, but Microsoft's investment implied Facebook's stock was worth $35.90 per share.

Yahoo Inc. is panning for gold in waters that Google Inc. abandoned.

Yahoo said in a blog post on Wednesday that it was testing a new tool to help people better organize the bounty of information that crops up while doing research on the Web.

Search Pad is similar in concept to Google Notebook -- a product the Web-search leader opted to halt development on last month.

Google offered its rival Yahoo a marriage of convenience this past summer: an advertising partnership that would have given Yahoo an alternative to selling all or part of itself to Microsoft.

That proposed marriage fell apart Wednesday in the face of opposition from government antitrust regulators, leaving a jilted Yahoo under growing pressure to devise a new plan for growth.

The agreement also thrust Google, which dominates the most lucrative business on the Internet, squarely into the sights of regulators. That could force the company to rein in its ambitious goals for expansion.

The search-advertising marriage between Google and Yahoo has been called off. A flurry of press releases from the two search-engine giants and the antitrust division of the Department of Justice made it clear that Google wasn't willing to go forward with the deal in the face of possible DOJ action. The whooshing sound you hear is $800 million in ad revenue disappearing from Yahoo's bottom line.

The top Republican on the House Energy and Commerce Committee is joining a chorus of lawmakers urging the Justice Department to scrutinize the planned Internet advertising partnership between Google Inc. and Yahoo Inc.

Texas Republican Joe Barton also accuses Yahoo of resisting congressional inquiries into the deal. He said that many of the company's answers to his questions "seemed designed to obscure rather than clarify how the Google-Yahoo partnership would work."

The U.S. Justice Department's antitrust investigation of the advertising partnership between Google and Yahoo has revealed the growing resentment and fear of Google's power among some of the biggest players in the advertising industry -- the very customers that Google needs to keep expanding its business.

In a possible blow to Yahoo Inc.'s hopes for an advertising partnership with Google Inc., the Justice Department has hired an antitrust litigator to review evidence for what could become a legal challenge to the deal.

The Wall Street Journal reported Tuesday that the attorney is Sanford Litvack, a former vice chairman at Walt Disney Co. and chief of the Justice Department's antitrust division during the Carter administration.

Executives from Microsoft Corp. and Time Warner Inc.'s AOL are trying to advance discussions on a possible combination that could give the software maker an alternative to a deal with Yahoo Inc., a newspaper reported Wednesday.

Word of a meeting follows a breakdown in negotiations between Microsoft and Yahoo over the weekend, one that led activist investor Carl Icahn to step up efforts Monday to replace Yahoo's board in an Aug. 1 shareholder vote.