Yahoo’s deal to outsource a share of its search advertising to Google, and to end talks about a sale of the company to Microsoft, is bad news for Yahoo shareholders. It also marks an effort by Google, the juggernaut of the search sector, to extend its market dominance. Such an extension would be bad for competition, bad for innovation in internet search, and bad for advertisers. The US Department of Justice should object to this deal.

The current saga began when Microsoft approached Yahoo about a takeover, with the goal of creating a stronger competitor to Google. The two sides, however, could not agree on price and, left stranded as an independent company, Yahoo has done a deal with Google to shore up its position. That deal will mean that Google advertisements appear alongside some of Yahoo’s search results in the US and Canada.