US watchdog probes Yahoo's deal with Google

Meanwhile Microsoft is reportedly considering a new approach to buy the beleaguered search firm

The Yahoo / Microsoft / Google drama is still ongoing

The US Justice Department has opened an anti-trust investigation into Yahoo's advertising partnership with Google, placing the future of the deal in jeopardy.

The two search firms renewed their co-operation in the wake of Microsoft's failed attempt to buy Yahoo. The Washington Post has reported that investigators are now planning to demand documents from other large companies in the online and media sectors, as well as the two central players.

A disruption to the Google deal would spell further woe for Yahoo, whose share value has steadily declined since talks with Microsoft failed. The company's stock was trading for as low as $19.59 per unit yesterday, a poor figured compared with the $34.08 from October last year.

Meanwhile the Wall Street Journal is reporting that Microsoft is now seeking partners for a new attempt to buy the elusive search firm, but this time with the intention of breaking up the company. The software giant is said to have approached News Corp and Time Warner, but neither company is thought to be interested in the proposal.