Speculation grew last month when we reported that the Google-Yahoo ad deal may be over. In a post on the official Google Blog, Senior VP David Drummond announced today that, due to legal concerns, a possible ad partnership between search engines Google and Yahoo would not be coming to fruition after four months of review. According to Mr. Drummond, "pressing ahead [with the deal] risked not only a protracted legal battle but also damage to relationships with valued partners."Yahoo and Google both run fairly prominent web advertising divisions which help them generate revenue, and as internet usage increases, so too does the importance of effective advertisement. In June, there seemed to be a chance of mutual cooperation between the two companies: Google gave Yahoo the option of using Adsense on its websites, with perhaps even more on the way. However, this was not to be.
When the deal was first proposed, the two companies decided to wait a little bit and give regulators time to review the deal to avoid any possible negative consequences. But even after four months, regulators still have concerns about the agreement, and, in order to preserve the "long-term" interests of Google, the company has decided to call the deal off. However, should any of you worry that lawsuits may hinder future innovation, take heart: Mr. Drummond also stated that the company would never "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."
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