Yahoo is "disappointed" with Google's decision to cancel plans for a search advertising partnership with Yahoo amid opposition from antitrust regulators and advertisers.
WASHINGTON (Reuters) - Google Inc. canceled plans for a search
advertising partnership with Yahoo Inc amid opposition from antitrust
regulators and advertisers, Google's chief legal officer said in a blog
posting on Wednesday.
Yahoo expressed dismay at Google's decision, saying it was
"disappointed that Google has elected to withdraw from the agreement
rather than defend it in court."
The Justice Department, in a statement issued on Wednesday, said it had
told Google that it planned to file a lawsuit to block the deal on
"Had the companies implemented their arrangement, Yahoo's competition
likely would have been blunted immediately with respect to the search
pages that Yahoo chose to fill with ads sold by Google rather than its
own ads," the Justice Department said.
Google shares were down 1.32 percent in late-morning trade at $362.16,
while Yahoo was up 5.32 percent at $14.01. Both are traded on the
Google and Yahoo, Nos. 1 and 2 in the Internet search market, announced
the planned partnership in June but delayed implementation to allow the
Justice Department to scrutinize it for antitrust issues.
Google said it pulled out of the deal rather than face a protracted legal fight.
"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," the
Google legal officer, David Drummond, said in his Internet posting.
"We're of course disappointed that this deal won't be moving ahead," he said.
Between them, Google and Yahoo had more than 80 percent of the web search market in August, according to comScore Inc.
(Reporting by Diane Bartz; editing by John Wallace)
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