(Reuters) - Google Inc., facing a U.S. Justice Department probe of its search-advertising partnership with Yahoo Inc., will proceed with the agreement by early October, Bloomberg said.

"We are going to move forward," Google Chief Executive Eric Schmidt said in an interview with Bloomberg Television on Thursday in Denver.

"We are in the process of talking to the government. They've not indicated one way or the other how they're dealing with us," the news agency quoted Schmidt as saying.

Google, with more than 60 percent of the internet search market, and Yahoo, with 16.6 percent, agreed in June last month on an advertising partnership under which Yahoo will let Google put search ads on its site.

The deal has raised concerns that it will give Google too much power in the $65 billion online advertising market, and the U.S. Justice Department launched a formal antitrust investigation in July.

"We always worry a little bit, but we think our arguments are pretty strong," Schmidt told Bloomberg.

Google was not immediately available for comment.

(Reporting by Saumyadeb Chakrabarty in Bangalore)

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