Yahoo and Google have delayed the start of their search-advertising arrangement and are reportedly back at the table revising the initial deal made in June. That deal has spurred much controversy in the advertising community in the past four months.
The two Internet giants shortened their existing ad agreement from 10 years to two and put a 25 percent sales cap on Yahoo’s revenue in an effort to get approval by the Department of Justice, according to The Wall Street Journal. The revision also reportedly allows Google advertisers to opt out of having ads displayed on Yahoo sites.
“We are continuing to have cooperative discussions with the Department of Justice about this arrangement and agreed to a brief delay in implementing the agreement while those discussions continue,” said Adam Kovacevich, a Google spokesperson, in an e-mail. “We are confident that the arrangement is beneficial to competition, but we are not going to discuss the details of the process.”
Tracy Schmaler, spokesperson for Yahoo, said she would not comment on published reports but added, “Our discussions with the DOJ are ongoing.”
The Department of Justice is thoroughly examining the deal and was expected to have made a decision on the agreement by early October, but those familiar with the situation said the DOJ needs to take its time because the deal would have a massive impact on search advertising.
At stake is the current price of search advertising and whether Yahoo will continue to operate in the search business.
The DOJ hired well-known attorney Sanford Litvack to lead the review. Litvack has been described by some observers as a tough litigator when it comes to antitrust issues.
Several advertising groups and companies have objected to the deal. The Association for National Advertisers, the World Federation of Advertisers, and the…