Google and Yahoo said on Friday that they were delaying implementation of their controversial paid search ads deal to allow more time for the Justice Department to evaluate its potential impact on the marketplace. Google had previously said the deal would go into effect as scheduled despite absence of a final regulatory determination of the anti-trust implications.

Earlier Google launched a site to explain the deal and its potential implications in the midst of growing opposition among some advertisers and trade groups. In addition, Yahoo president Sue Decker wrote a blog post entitled “Myth-busting and the Yahoo!-Google agreement” to try and calm advertiser concerns.

Given the new pro-regulation climate in Washington, in the wake of the Wall Street meltdown, it’s possible that the proposed arrangement is coming under tougher scrutiny than when it was originally announced. Google has consistently maintained that the deal is not subject to formal Justice Department approval because it’s not a merger or acquisition and Google doesn’t have the ability to control prices.

Related Topics: Google: AdWords | Google: Critics | Legal: General

About The Author: Greg Sterling is a Contributing Editor at Search Engine Land. He writes a personal blog Screenwerk, about SoLoMo issues and connecting the dots between online and offline. He also posts at Internet2Go, which is focused on the mobile Internet. Follow him @gsterling. See more articles by Greg Sterling