The Washington Post’s Post IT tech blog tells us that the highly anticipated (and a little dreaded, in some quarters) merger between Google and Yahoo — called “Goohoo” by some — has been delayed to allow time for the U.S. Justice Department to further review the deal.

The announcement delays slightly (less than a month, according to the article) a huge deal that has far-reaching implications to the world of online business. These two companies have been negotiating a deal for months now, and have even tested programs together.

Combined, Google and Yahoo would comprise an enormous majority of the online advertising marketshare. Google’s software, which places text ads in conjunction with results on its hugely trafficked search engine, succeeds more than does Yahoo’s. It’s believed that Yahoo wants to use that software to boost its own earnings and avoid another acquisition threat, such as that attempted by Microsoft earlier this year.

Federal overseers have been taking their time approving the deal, amidst very real concerns about monopoly. Hence, the slight delay announced last week isn’t a huge surprise.

From the Post IT article:

When the cooperative agreement was announced on June 12, Google and Yahoo said they would give the U.S. Department of Justice about three and a a half months to review the deal. That time period has lapsed, however, and after meetings with Justice Department officials today, Google and Yahoo lawyers have agreed to delay its implementation.

Under the agreement, Google will provide advertising to run alongside some queries conducted on Yahoo’s search engine.

Google and Yahoo said consumers will benefit because Google has a better way of matching relevant advertising to search queries. But critics said the deal would allow the two companies, who rank number one and number two in the booming search advertising industry, to operate as a monopoly.

What do you think? Would this semi-merger create more opportunities for online ad revenue, or less? Would it be best if the two companies remained competitors, or would you prefer that they merged ever further for the sake of convenience?

Read “Goohoo Delayed To Allow Justice Department More Time To Review” by Peter Whoriskey here.