Google-Yahoo Advertising Deal Under Canadian Scrutiny

Ottawa, Ontario (AHN) - Canada's Competition Bureau will look into the proposed advertising partnership of Google Inc. and Yahoo! Inc., the worldwide web's most popular search engines.

"It's a sizeable agreement and we're going to take a close, hard look at it," Anthony Durocher, a senior competition law officer told Bloomberg in an interview.

Yahoo targets the Google partnership to generate sales of more than $450 million annually. The Internet advertising market is expected to hit $65 billion this year.

A similar review is being undertaken by U.S. regulators. The joint advertising agreement will take effect in October, pending regulatory reviews and approvals.

The advertising partnership was announced in June after Yahoo declined several takeover offers from Microsoft Corp.

Microsoft claims the advertising deal will curb competition in Internet advertising and jack up prices. Analysts said Microsoft has a larger share of the market in Canada.

Google, on the other hand, claims the advertising deal is favorable to competition even if its share in search traffic increases.

As of July, ComScore ranked the websites according to market share in the U.S. as follows: Google at 61.9 percent, Yahoo at 20.5 percent and Microsoft at 8.9 percent.