Washington, United States - Google Inc and Yahoo Inc face intense US Justice Department scrutiny of their deal to share some advertising revenue, and the heat will likely increase under a new administration, antitrust experts said.

Google, with more than 60 per cent of the Web search market, and Yahoo, with 16.6 per cent, announced a deal last week that would allow Yahoo to place Google ads on its site and collect the revenue.

The firms said Yahoo's cash flow could grow by US$250 million (S$342 million) to US$450 million in the first year under the deal, which Yahoo sought as an alternative to software giant Microsoft Corp's US$47.5 billion buyout offer.

Yahoo and Google describe the deal as very limited. 'These are still independent companies who will continue to compete aggressively,' said Yahoo lawyer Hewitt Pate of law firm Hunton and Williams.

Mr Bruce McDonald, a Jones Day antitrust attorney and former deputy assistant attorney general, pointed out that the arrangement could lessen Yahoo's incentive to compete vigorously against Google because Yahoo would collect revenue no matter which company placed an advertisement.

Mr Evan Stewart, of law firm Zuckerman Spaeder, agreed.

'Rhetoric is not evidence,' he said. 'At the end of the day, you're going to have to show some very effective computer modeling ... to show that consumers are at worst no worse off.'

'The Justice Department should have a very healthy skepticism when number one and number two get together for a joint venture and say they're going to compete,' he added.

But Mr David Turetsky, of Dewey and LeBoeuf LLP, pointed out that Google and Yahoo crafted the deal after a test that the Justice Department looked into.

'They've had a dialogue with the DOJ (Justice Department) ... which is unusual. DOJ is not in the business of giving counseling to companies as to what flies,' Mr Turetsky said.

But companies that buy ads are already concerned.

'Given the history of what's taking place here, I would be very suspicious. I would think that they were structuring it to avoid regulation,' said a lawyer who asked not to be named because he represents advertisers concerned about the deal.

This lawyer predicted the Justice Department would approve the deal - 'they give everything a thumbs up' - but it could run into trouble after President George W. Bush's team leaves office next year.

Both leading presidential candidates, Republican Sen. John McCain and Democratic Sen. Barack Obama, are expected to take a tougher antitrust line than Mr Bush.

'This is something that is obviously reviewable by any new administration,' said the lawyer representing advertisers.

A source familiar with Microsoft's thinking argued that the Yahoo/Google deal essentially set up minimum prices since Yahoo would never sell an ad for less than Google would give for that space on a user's computer screen. -- REUTERS