Google has decided to cancel its plans to enter an advertising partnership with Yahoo. Google stated the reason being to avoid having a “protracted legal battle” with regulators. The partnership was going to see Google providing some of the advertising around Yahoo’s search results. This would have been an interesting area for both Google and Yahoo to enter, as they are essentially competitors. Google is way ahead in the contextual adversing game though.
It is a major setback for Yahoo, which is trying and failing to please shareholders after it rejected a takeover offer from Microsoft which valued Yahoo at $33 a share, or $47.5bn (£29.4bn) in total. Yahoo shares were
trading at $14 each on Wednesday, and shareholders are less than happy.
Google said it would not allow the prospect of a legal battle to distract it from its core mission. “That would be like trying to drive down the road of innovation with the parking brake on,” Google said in a blog.
“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,” Drummond wrote. “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.” Associated Press
The concept didn’t pan out because Google and Yahoo combined control more than 80 percent of the U.S. search advertising market. Microsoft and the Association of National Advertisers, among others, argued the arrangement would enable Google to gradually increase advertising prices and exert more control over the flow of e-commerce.
