Google Inc and Yahoo Inc are delaying their controversial search advertising partnership, Yahoo reported on Friday.

"The companies have agreed to a brief delay in implementing this agreement to continue our ongoing discussions with the (U.S.) Department of Justice," Yahoo said in a statement. "We have had discussions with regulators and look forward to responding to their questions about this agreement." The deal is still expected to be pushed through during October.

The deal, which allows Google to sell advertising for some of Yahoo's online advertising space, is unpopular with advertisers who fear higher prices.

Google uses an algorithm that aims to match consumers with what it says are the most appropriate ads, a formula some advertisers find mysterious and bothersome.

An antitrust lawyer, who regularly brings mergers to the Justice Department, said that the delay was probably not a good sign for Google and Yahoo. "It means that they were not going to get a clean bill of health in time, and perhaps it's much worse than that. They don't want to go forward and be told that there's potentially a very serious problem there," said the lawyer.

Source: EJC Media and Reuters

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