You have to admire the sledgehammer stylings of Google CEO Eric Schmidt, who loves to accuse Microsoft (justifiably, I might add) of bullying lobbying tactics in our nation’s capital, in the latest moves in the regulatory fight over the controversial search ad outsourcing partnership that Yahoo and Google have struck.

Today, just days before the Justice Department will decide whether to move ahead with a lawsuit to stop the Yahoogle deal from proceeding or let it move forward with some other remedy or tweaking, Schmidt announced that he would be campaigning for Democratic presidential candidate Sen. Barack Obama in the last two weeks of the election.

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Yahoo and Google have agreed to delay their online search ad partnership to give the Justice Department more time to evaluate the deal.

Spokesmen from both Yahoo and Google confirmed the delay.

Although Google execs have been especially adamant that the arrangement was going forward no matter what, the move is not surprising, given the increasing opposition to the deal involving the No. 1 and No. 2 online search leaders.

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To be fair, the whole market was dragged down today due to worries about a deepening recession. But Yahoo’s ever-decreasing share price has got to have the company and its investors mighty worried.

Hitting lows not seen since the dot-com doldrums of 2001 and 2002, Yahoo closed at $15.58, down $1.38 or 8.14 percent, giving the troubled Internet giant a market cap of just $22.08 billion.

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This week, it will be Yahoo stepping up the volume in the debate over the controversial Yahoo-Google ad outsourcing deal.

And it could not come a minute too soon.

Yahoo has been unusually quiet about the issue, after weeks of Google’s more aggressive and listen-to-us-big-brains approach.

That’s all resulted in more Justice Department scrutiny, more critics piling on, including the typically dulcet Canadians, who might also be launching an antitrust investigation.

Thank goodness, then, that the first foray by Yahoo President Sue Decker makes the case in a much more sensible and straightforward manner, which has been sorely needed on the Yahoogle side.

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It must have been the space cakes here in Amsterdam–otherwise how could we miss mentioning a new Web site that Google has put up about its controversial search advertising outsourcing deal?

Even as the Justice Department drills down on the deal, a very helpful Google PR guy sent information about the site, which is designed to convince critics of the benefits of the Yahoogle partnership.

But, curiously, the site touts the deal by using a woefully-out-of-context quote from a piece I did last week.

Apparently, I support it! (Actually, I do not.)

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Yesterday, BoomTown took a rather strong stand against Google and its recent aggressive efforts to defend its outsourcing deal to sell some of Yahoo’s search ads.

Given that the pair have a more than 80 percent combined market share in the search business, I and many others–advertisers, publishers and state and federal regulators–are a bit nervous about further concentration of market power in one set of hands, even if they are such Googley hands.

But in the interest of fairness and because I like to argue with myself, here is a counterpoint with three key reasons why Google and Yahoo might hold firm in launching the partnership, which sources said is likely to start on Oct. 9.

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It used to be, many years ago, that longtime Silicon Valley tech exec Eric Schmidt could work up a very significant head of steam when talking about the thuggish monopolistic practices of Microsoft and its negative impact on the tech industry.

And, for the most part, Schmidt was dead right.

Thus, BoomTown is both gobsmacked and a bit in awe that Schmidt–now sitting atop at the high-tech pig pile as CEO of the powerful search giant, Google–can, with a straight face, make the argument that everyone is wrong to be nervous about its deal with Yahoo to serve some of its search ads, even though the pair make up more than 80 percent of the search market.

Still, at a press conference yesterday, Schmidt went on the offensive to defend the Yahoo deal, which is set to begin in a few weeks, in a most peculiar way.

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After the news broke that former Microsoft exec Joanne Bradford was headed to Yahoo as the head of its U.S. ad sales and more, I got to talk to both her and her new boss, Hilary Schneider, on the phone this morning about the move.

Bradford left her job as national ad sales chief at Spot Runner, where she arrived just six months ago, to take the position of SVP of U.S. revenue and market development at Yahoo.

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In what is both a surprising and not-so-surprising move, Yahoo has replaced its top U.S. ad sales exec with one from Microsoft.

The departure of Dave Karnstedt, who took over last year when longtime Yahoo ad sales exec Wenda Millard left Yahoo in the first of many controversial partings, has been long rumored internally.

Karnstedt will join Redpoint Ventures and is being replaced by Joanne Bradford, a longtime and well-known Microsoft exec who decamped from the software giant to helm national ad sales at the trendy start-up Spot Runner just six months ago.

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As BoomTown readers know, I have been adamant that Yahoo’s online ad outsourcing deal with Google is troublesome on a lot of levels. Although, so is government intervention.

From giving advertisers less choice to creating a de facto monopoly to its potential for stifling innovation, the deal gives me the heebie-jeebies, given that the pair control 80 percent of the online search ad market.

Now, The Wall Street Journal is reporting that the Justice Department has quietly hired an outside litigator to contemplate whether the government should consider mounting an antitrust case against the search giant.

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Calling Dick Tracy! Guess what the U.S. Department of Justice noticed yesterday?
Google is really, really big and powerful.
Thus, the Feds are casting a gimlet eye on an online ad partnership Google (GOOG) is considering with Yahoo (YHOO), which is trying to goose its value in the face of an unwelcome takeover bid from the [...]

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