The search-advertising marriage between Google and Yahoo has been called off. A flurry of press releases from the two search-engine giants and the antitrust division of the Department of Justice made it clear that Google wasn’t willing to go forward with the deal in the face of possible DOJ action. The whooshing sound you hear is $800 million in ad revenue disappearing from Yahoo’s bottom line.
According to a statement by David Drummond, Google’s senior vice president for corporate development and chief legal officer, Google continues to believe the deal would be good not just for Google and Yahoo, but for users, advertisers and publishers as well.
“However, after four months of review,” Drummond said, “including discussions of various possible changes to the agreement, it’s clear that government regulators and some advertisers continue to have concerns about the agreement. Pressing ahead risked not only a protracted legal battle but also damage to relationships with valued partners. That wouldn’t have been in the long-term interests of Google or our users, so we have decided to end the agreement.”
In the past week, both Yahoo and Google have proposed changes to the advertising partnership to reduce or eliminate DOJ concerns. However, Justice made it clear Wednesday that it planned to file an antitrust lawsuit if the deal went forward.
“The companies’ decision to abandon their agreement eliminates the competitive concerns identified during our investigation and eliminates the need to file an enforcement action,” said Thomas O. Barnett, assistant attorney gneral in charge of the antitrust division. “The arrangement likely would have denied consumers the benefits of competition — lower prices, better service, and greater innovation.”
The DOJ went on to say that Yahoo provides an alternative to Google in the Internet search-advertising and search-syndication markets. If the deal went forward, the department said, Yahoo would…