Google plans to start deal with Yahoo

WASHINGTON - Google Inc., facing Justice Department scrutiny of its advertising partnership with Yahoo Inc., will proceed with the agreement by early October, chief executive Eric Schmidt said.

"We are going to move forward," Schmidt said yesterday. "We are in the process of talking to the government. They've not indicated one way or the other how they're dealing with us."

Google is trying to pull off the deal amid concerns it will give the company too much power in the $65 billion online advertising market. Senator Herb Kohl, a Wisconsin Democrat, asked last month whether the agreement will reduce Yahoo to "nothing more than the newest satellite in the Google orbit."

"We always worry a little bit, but we think our arguments are pretty strong," Schmidt said yesterday. "Yahoo has made it very, very clear they're going to take the best parts of their network and ours and combine them."