Google Walks Away from Yahoo Ad Deal
By Martin Kelly, Editor, Search Engine Room
GOOGLE has walked away from its controversial advertising distribution deal with Yahoo in the United States. Under the proposed arrangement, which aroused immense regulatory suspicion, Google ads would have been served on Yahoo and its network sites in a move that many believed would effectively end competition between the formerly fierce rivals.
The resulting outcry has prompted Google to reassess the value of such a relationship. In the end the search giant decided the potential damage to its brand wasn’t worth the money it could make.
“It's clear that government regulators and some advertisers continue to have concerns about the agreement,” said David Drummond, Google’s Senior Vice President Corporate Development and Chief Legal Officer. “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.”
The Google decision is another blow for Yahoo, the target of an aborted takeover by Microsoft earlier this year. “Yahoo! is disappointed that Google has elected to withdraw from the agreement rather than defend it in court,” the company said.
Google pulled out after opposition from the Department of Justice, “despite Yahoo!'s proposed revisions to address the DOJ's concerns.” Analysts estimated the agreement could have generated up to US$450m for Yahoo in the first year alone. Search Engine Room: November 7, 2008
