Google CEO Eric Schmidt announced at a press conference that Google would start putting search ads on Yahoo's site from 11 October 2008 as agreed with Yahoo even as US regulators have not completed reviewing the controversial pact.
Although Google did not require government approval to move ahead with the deal, it had given regulators four month time to look at the deal to see if they met with US antitrust laws and ''To delay any longer would be to lose money, time is money in our business'' he said.
Under the four-year deal announced in June, Yahoo would get a portion of what advertisers paid Google for ads that appear with Yahoo search results. According to estimates the deal would generate for Yahoo about $250 million to $450 million during its first 12 months and up to $800 million annually thereafter.
Schmidt blamed rival Microsoft for raising opposition to the deal, which is now being reviewed by the European Commission as well as the Justice Department, Canadian authorities and nearly a dozen states attorneys general.
Microsoft earlier had tried unsuccessfully to buy Yahoo with an eye on its online search engine.
Since Google and Yahoo combined control more than 80 per cent of the fast growing U.S. market for advertising related to Internet searches, the deal raised competitive concerns.
The New York-based trade group, which represents 400 companies that spend more than $100 billion annually on advertising said "a Google-Yahoo partnership would control 90 per cent of national search advertising inventory."
Schmidt said Google hasn't explained the Yahoo deal well and denied vehemently that it would cause prices to rise for advertisers.
The Association of National Advertisers in the US, the World Association of Newspapers out of Paris and the UK-based Institute of Practitioners in Advertising want it blocked.
Schmidt said Google spent "months and months and months" working on the deal with Yahoo in order to be within the framework of antitrust laws and the company handed out an extensive fact sheet defending the deal after the press conference.
"The deal was designed to meet precisely the current antitrust laws in the U.S.," he said. "They're going to take our ads and put them in places where they have no ads," Schmidt said. "They see this as an addition to their business, not a replacement."
The EU has started an investigation to determine whether the Google –Yahoo pact would have an impact on competition within the European Economic Area.
"Yahoo has been and will continue to work with the relevant regulatory agencies to provide officials with the necessary information about this business agreement, which we believe will strengthen competition in search and make advertisements more relevant for our users," the company said in a statement.