The Justice Department has quietly hired one of the nation's best-known litigators, former Walt Disney Co. vice chairman Sanford Litvack, for a possible antitrust challenge to Google Inc.'s growing power in advertising.

Mr. Litvack's hiring is the strongest signal yet that the U.S. is preparing to take court action against Google and its search-advertising deal with Yahoo Inc. The two companies combined would account for more than 80% of U.S. online-search ads.

In 4 p.m. trading on the Nasdaq Stock Market, Google shares had tumbled 5.5%, or $24.30, to $419.95, while Yahoo shares were up 18 cents to $18.26.

For weeks, U.S. lawyers have been deposing witnesses and issuing subpoenas for documents to support a challenge to the deal, lawyers close to the review said. Such efforts don't always mean a case will be brought, however.

It isn't clear whether a U.S. challenge would target the Google-Yahoo deal alone or take on broader aspects of Google's conduct in the growing online-advertising business.

It is relatively rare for the Justice Department to hire a special counsel from outside the department. David Boies was brought in as a special counsel to build the landmark antitrust case against Microsoft in 1998, and Stephen Axinn, another well-known New York litigator, was hired to challenge Worldcom Inc.'s proposed buyout of Sprint Corp.