DOJ deters Yahoo-Google deal

( to the Department of Justice, the proposed Google advertising partnership with Yahoo is officially kaput.

Over the past four months, the two companies had been working on a deal that would allow Yahoo to show ads over Google’s network, consequently generating more revenue for Yahoo and providing more relevant ads for Google. However, “Yahoo! Inc. and Google Inc. abandoned their advertising agreement after the Department of Justice informed the companies that it would file an antitrust lawsuit to block the implementation of the agreement” according to a DOJ press release.

The move grew out of the DOJ’s increasing concern of Google’s dominating existence in the Internet search advertising market. “The Department said that, if [the deal were] implemented, the agreement between these two companies accounting for 90 percent or more of each relevant market would likely harm competition in the markets for Internet search advertising and Internet search syndication.”

So, instead of defending the deal in court, Google dropped out of the partnership.

Chief legal counsel David Drummond at Google writes : “We’re of course disappointed that this deal won’t be moving ahead. But we’re not going to let the prospect of a lengthy legal battle distract us from our core mission. That would be like trying to drive down the road of innovation with the parking brake on.”

Antitrust? Legal battles? Has Google become the new Microsoft? Are they too big for their own good? Or was there simply not enough upside to the deal for Google to weather the legal storm? You decide… drop a comment.