Microsoft Slams Yahoo-Google Search Pact

Under terms of the June agreement, Google will provide Yahoo with access to its AdSense for search and AdSense for content advertising programs, and the two companies will also work to improve interoperability between their respective instant messaging technologies.

But in a Tuesday hearing before the Senate Judiciary Committee Subcommittee on Antitrust and the House Judiciary Committee Antitrust Task Force, Brad Smith, Microsoft senior vice president and general counsel, decried the potential impact of one company controlling up to 90 percent of the search advertising market.

"If search is the gateway to the Internet, and most believe that it is, this deal will put Google in a position to own that gateway and the information that flows through it," Smith said in a statement.

Smith also noted that the $800 million in additional revenue that Yahoo claims the deal will generate will amount to "money out of the pockets of American businesses, big and small, who will pay higher prices for the very same ads they buy from Yahoo! today."

Google's stranglehold on the market would result in fewer choices and higher prices for online advertisers, and its ability to track users' online search behavior could also create "significant" privacy issues, according to Smith.

Google insists that the deal would not boost Google's search traffic, since Yahoo would run its own search and advertising programs. And since Google doesn't set prices for advertisements, and allows advertisers to handle pricing through an auction system, the search giant says won't have the ability to raise prices.