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Down to the wire on Google-Yahoo

Word in Washington is the trustbusters will issue a yea or nay--or something in between--by the end of next week. Assuming the government is still solvent, of course.

The buzz around Washington is that the Justice Department will rule on whether to approve the Google-Yahoo advertising pact by late next week.

Of course, the government being the government, maybe it'll do something supremely annoying and keep us in the dark beyond next Friday. But the calendar suggests that a decision is nigh. In June, when Google and Yahoo announced their accord, the companies voluntarily delayed implementing its terms for up to three and a half months to let the Justice Department review the deal.

If the antitrust division decides not to oppose the agreement, the big question is whether it will attach conditions. One source involved with the opponents of the partnership said there's not much chance the trustbusters will allow the deal to be implemented without modification. Of course, nobody outside of the Justice Department really knows the answer yet--and they ain't talking. True to form, a spokeswoman for the Justice Department declined to comment.

Since the deal's announcement, Microsoft and the advertising community have been making the case against the Yahoo-Google agreement. The Association of National Advertisers, which represents over 400 companies, last month issued a public letter maintaining the arrangement would raise prices and limit choice. Google and Yahoo obviously see things differently. Yahoo president Sue Decker then responded with a blog refutation of the argument put forth by the ANA and other critics:

This agreement gives advertisers a new opportunity to bid for placement on an additional network that includes Yahoo inventory. They will bid for what they think this opportunity is worth at prices that produce positive ROI. That's how pricing works today in this industry and this agreement won't change that.

So for now, we're stuck in a he-said, she-said limbo, where the spinmeisters on both sides are slinging as much hash as possible. Despite their conflicting predictions of reality, the truth is that nobody will know whether this deal is pro- or anti-competitive until long after it goes into effect--assuming that Uncle Sam's minions give it the green light.

To be continued.