Yahoo!’s plan to boost its profits through an online advertising partnership with Google could run into trouble after it emerged that the US Justice Department has hired an veteran antitrust litigator to look into the tie-up.

Sanford Litvack, a former vice chairman at Walt Disney and a lawyer at the Justice Department’s antitrust division during the Carter administration, is reviewing evidence for a potential antitrust case against Google or the search-advertising partnership, according to the Wall Street Journal.

Yahoo! hopes that Google’s technology for display and search-based web advertising will bolster its annual revenue by about $800 million (£454 million).

The partnership, part of Yahoo!’s attempt to ward off a takeover attempt by Microsoft, would allow Google to sell some of the adverts displayed alongside search results on Yahoo! sites.

Google and Yahoo! together control more than 80 per cent of the US search advertising market.

The tie-up was announced in June but the companies agreed to postpone the partnership’s start date until October to give regulators time to examine the ramifications.

Scott Cleland of Precursor, an internet industry consultant, said Litvack’s hiring, coupled with opposition from a group of big advertisers, including Coca-Cola, Procter & Gamble and General Motors, did not bode well for the deal.

“This is turning into a very serious investigation. Google and Yahoo! have a steep hill to climb,” he said.

Google executives have predicted the partnership will clear all regulatory hurdles.

Yahoo! said: “We have been informed that the Justice Department is seeking advice from an outside consultant, but that we should read nothing into that fact. We remain confident that the deal is lawful.”

A regulatory challenge could delay the advertising partnership until next year.

Google had to wait 11 months before getting the Government’s green light to complete its $3.2 billion acquisition of DoubleClick, an online advertising service, this year.

Before teaming up with Google, Yahoo! rejected a $47.5 billion takeover offer from Microsoft — a decision that has forced Yahoo!’s share price down by nearly 50 per cent below Microsoft’s last offer of $33 per share.

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