Google and Yahoo Amend Search Deal To Appease Regulators

Things have been looking grim for the Google Yahoo search deal and now the two companies are taking matters into their own hands. Google and Yahoo have sent an amended version of their search partnership deal to the Department of Justice in efforts to get it past government scrutiny, according to the Wall Street Journal: […]

Things have been looking grim for the Google Yahoo search deal and now the two companies are taking matters into their own hands. Google and Yahoo have sent an amended version of their search partnership deal to the Department of Justice in efforts to get it past government scrutiny, according to the Wall Street Journal:

The new plan, which the companies submitted over the weekend, shortens the original agreement to two years from ten years and caps the revenue
Yahoo can generate from the deal to 25% of Yahoo's search revenue, according to these people. Previously, there was no revenue cap. It also specifies that Google advertisers can opt out of having their ads displayed on Yahoo sites.

Google and Yahoo announced a deal to serve Google ads to underperforming Yahoo terms in June. The companies originally agreed to hold off implementation for four months while Justice scrutinized the deal for antitrust violations, but that deadline has come and gone without a decision from the DoJ.

It is unclear if the new concessions will appease regulators, who think that a partnership (even a non-exclusive one like this) between the top two search advertisers would raise disturbing monopoly concerns. But the deal is important to Yahoo, who was fighting off a purchase offer from Microsoft when Google swept in with its search proposal. If the deal fails, Yahoo will be ripe for a fire sale to Microsoft at a much lower price. From the WSJ:

Yahoo appears to be willing to accept certain limits on the upside from the deal, which it had estimated to be in the hundreds of millions of dollars of additional annual revenue, in order to ensure it proceeds.

See also: