Google terminates Yahoo! ad deal
Google has terminated its search advertising deal with Yahoo! in order to avoid a “protracted legal battle” with regulators.
The proposed deal would have seen Google ads displayed around Yahoo!’s search results.
David Drummond, Google senior vice president, corporate development and chief legal officer, said: “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.”
In a statement, Yahoo! said: “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 added: “While the implementation of the services agreement with Google would have enabled Yahoo! to accelerate its investments in its top business priorities through an infusion of additional operating cash flow, this deal was incremental to Yahoo!’s product roadmap and does not change Yahoo!’s commitment to innovation and growth in search.”
Yesterday, NewsLine reported that Google and Yahoo! were making a final attempt to win approval for the deal in a revised submission to the US Department of Justice (see Google and Yahoo! make last attempt to win ad deal approval).
The companies adjusted their original proposal, reducing the length of the deal from 10 years to two and putting a 25% cap on the percentage of Yahoo! search revenue that could be generated from Google.
Google advertisers would also have had the chance to opt out of appearing on Yahoo! under the new proposal.
The ramifications of today’s news will be discussed at MediaTel’s “Future of Online” seminar on November 25 – the panel includes Google’s Dominic Allon.
Details can be found on our Seminar website: click here for more information and booking
Google: 020 7031 3000 www.google.com Yahoo!: 020 7808 4200 www.yahoo.com