Google has hired controversial banker Frank Quattrone as a strategic advisor in his first major high-profile role since he was acquitted by a US judge of obstruction of justice charges last year.

Google is thought to want him on board to help meet the threat of a potential takeover of Yahoo by Microsoft.

At Credit Suisse First Boston Quattrone once earned $120 million in one year and underwrote some of the biggest dotcom boom flotations. But he was accused by Federal prosecutors in 2003, as the internet boom had turned to bust, of forwarding an e-mail to colleagues in December 2000 suggesting that it was “time to clean up those files.”

It was alleged that he gave favoured clients "hot stocks" ahead of flotations.

He spent years fighting to clear his name in court. His first trial on obstruction charges ended in a hung jury. He was convicted in a second trial but an appeals court overturned the conviction.

Over 25 years, Quattrone led teams at Morgan Stanley, Deutsche Bank and Credit Suisse which were responsible for 400 mergers valued at more than $500 billion. His client list includes many of Silicon Valley’s blue-chip tech firms.

Last month, Quattrone announced that he and some former colleagues had started Qatalyst Group, a tech-focused investment banking boutique based in San Francisco, to provide merger and corporate finance advice to technology companies.

At the time Google chief executive Erid Schmidt said: “I look forward to working with him again and am very enthusiastic about Qatalyst’s prospects for success."

Yahoo announced on Wednesday it had agreed to a test of whether it should turn over its Web search advertising sales to Google so it can focus on other efforts.

The test is thought to be part of a planned three-way alliance to combine Yahoo with Time Warner’s AOL to ward off Microsoft Corp’s two-month-old, $42 billion takeover bid.

Analysts say Google appears to have held back from getting involved in the Yahoo-Microsoft deal until it had antitrust clearance for its own $3.4 billion DoubleClick acquisition, closed a month ago.

The Times revealed this morning that Microsoft is in talks with News Corp, parent company of The Times, about a possible joint bid for Yahoo.

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