Google announced Wednesday that it has decided to end its proposed advertising search partnership with Yahoo, citing ongoing "concerns" from regulators and advertisers that have delayed implementation of the deal for months and amid the prospect that a Justice Department review would drag well into next year.
“After four months of review, 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,” David Drummond, senior vice president of corporate development and chief legal officer, writes on Google’s blog.
Under the deal Yahoo would have had the option of using Google to provide ads on its websites (and its publisher partners' sites) in the U.S. and Canada. It was seen as especially beneficial to Yahoo, a distant second in the search wars and which has been struggling to convince investors that it could grow revenue organically rather than agree, for example, to be purchased by Microsoft.
For its part, Yahoo expressed disappointment at what was clearly a decision Google arrived unilaterally.
"Yahoo! continues to believe in the benefits of the agreement and is disappointed that Google has elected to withdraw from the agreement rather than defend it in court," it said in a statement.
Only this week Google and Yahoo submitted an amended proposal to Justice, which would have shortened the agreement and capped Yahoo’s potential revenue, in an attempt to appease the regulators.
But apparently that was not going to be enough.
“We're not going to let the prospect of a lengthy legal battle distract us from our core mission," Drummond said. "That would be like trying to drive down the road of innovation with the parking brake on."
