Open

Coming up

Don't miss

Replay


LATEST SHOWS

THE INTERVIEW

Ron Dermer, Israeli ambassador to the United States

Read more

THE OBSERVERS

A look back at some of the Observers' best stories

Read more

DEBATE

Argentina Defaults: Kirchner Cries Foul Over 'Vulture Funds' (part 2)

Read more

DEBATE

Argentina Defaults: Kirchner Cries Foul Over 'Vulture Funds'

Read more

AFRICA NEWS

Ebola death toll tops 700

Read more

AFRICA NEWS

Dozens of youths trampled to death on Conakry beach

Read more

MEDIAWATCH

Renault's women drivers ad deemed sexist

Read more

DEBATE

Iraq's Christians: Nowhere to Run? (part 2)

Read more

DEBATE

Iraq's Christians: Nowhere to Run?

Read more

  • Live: Israeli soldier feared captured, ceasefire 'over'

    Read more

  • Ugandan court strikes down anti-gay legislation

    Read more

  • Regional summit to tackle deadly Ebola outbreak

    Read more

  • French hospital to open wine bar for terminally ill patients

    Read more

  • €2.5 million in cocaine ‘disappears’ from Paris police HQ

    Read more

  • Air France ground workers to strike on August 2

    Read more

  • Interactive: France’s new plan to counter jihadism in Africa

    Read more

  • Ukrainian army suffers losses in separatist attack

    Read more

  • Dozens killed and injured in Taiwan gas blast

    Read more

  • Argentinian markets plummet following default

    Read more

  • French Jews speak of growing fear in Paris amid Gaza conflict

    Read more

  • Video: Inside Hamas ‘terror’ tunnels in Gaza

    Read more

  • Sierra Leone declares state of emergency over spread of Ebola

    Read more

  • France remembers murdered socialist hero Jean Jaurès

    Read more

  • Scores feared dead in India landslide

    Read more

Google pulls out of search deal with Yahoo

Text by REUTERS

Latest update : 2008-11-05

Google Inc canceled plans for a search advertising partnership with Yahoo Inc after opposition from antitrust groups. The move provoked dismay at Yahoo.

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 U.S. 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 antitrust grounds.

"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 2.05 percent in late-morning trade at $359.30, while Yahoo was up 4.34 percent at $13.93. Both are traded on the Nasdaq market.

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.

In some ways, Google's decision to scrap the deal comes as a surprise. In August, Google Chief Executive Eric Schmidt said the company would move forward with the partnership in October, with or without approval from the Justice Department.

Advertisers -- who apparently had the ear of regulators -- hotly opposed the deal, arguing that Google and Yahoo's dominance of the market could mean they would rise prices.

Part of the impetus for Google's decision could be Yahoo's talks on buying the content and advertising operations of Time Warner Inc's AOL unit. Yahoo initially struck a deal with Google as a way to fend off an unsolicited takeover bid from Microsoft Corp.

There had been hints that the Justice Department was prepared to challenge the Google-Yahoo deal: The department hired litigator Sandy Litvack to work on its probe of the agreement.

Litvack was the department's antitrust chief under U.S. President Jimmy Carter.

The department's decision to hire Litvack was unusual, antitrust experts said, recalling the department's hiring of David Boies as outside counsel for its antitrust case against Microsoft. (Reporting by Diane Bartz; editing by John Wallace)


 

Date created : 2008-11-05

COMMENT(S)