Congress waded into the escalating fight over the future of Yahoo, demanding to know whether the internet company's advertising partnership with Google, intended to keep Yahoo out of the clutches of Microsoft, raises antitrust concerns.

Testifying before the Senate and House Judiciary Committees, executives from the three companies painted very different pictures of an agreement that will allow Google to sell some of the ads displayed alongside search results on Yahoo's web site.

While Microsoft said the deal would limit competition and raise prices in the online advertising market, Yahoo and Google insisted it would benefit consumers and advertisers.

The stakes are high for Yahoo. It has embraced the partnership with its rival Google as an alternative to a $47.5 billion acquisition offer from Microsoft.

But that decision to reject Microsoft has spawned a showdown with shareholders and activist Carl Icahn, who is trying to overthrow Yahoo's board and CEO Jerry Yang. If Washington somehow scuttles the partnership with Google, Yahoo could find itself under even more pressure to head into some kind of deal with Microsoft after all.

Yahoo and Google say Congress has little power to actually stop the arrangement, but lawmakers can use the bully pulpit to raise concerns about the deal.

Indeed, some of them turned up the heat Tuesday by asking whether the Google partnership will further weaken Yahoo and cement Google's dominance in the online advertising business.

House Judiciary Chairman John Conyers, D-Mich., asked whether the partnership would be more anticompetitive than a Microsoft purchase of Yahoo. And Herb Kohl, D-Wis., chairman of the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, said Congress needs to explore "whether this agreement will reduce Yahoo to nothing more than the newest satellite in the Google orbit."

Microsoft's senior vice president and general counsel, Brad Smith, noted that Google already controls at least 70% of the market for advertising tied to search results. The Yahoo partnership, he said, will let Google control up to another 20% of this market, reducing choices, pushing up prices for online advertisers and potentially compromising consumer privacy.

Source:AP News