Google abandons deal with Yahoo – 'reactive' or 'proactive'?

Google has decided to abandon its advertising partnership with Yahoo to avoid having a “protracted legal battle” with regulators.
The deal involved Google providing some of the advertising around Yahoo’s search results and would have been worth $800m (£494m) a year to Yahoo.
It was originally announced in June but has faced anti-trust objections.
Yahoo said in a statement it was disappointed that Google had decided not to fight for the deal in court. Yahoo was allegedly relying on the deal with Google to help to placate shareholders angry about Yahoo rejecting Microsoft’s takeover offer.
How can we best analyze this action – is this truly a reaction to the anticipated ‘legal battle’ that may have followed this partnership, or is this yet another of Google’s planned objectives, which may prove to be a big blow to its arch rival. Furthermore, will this event favor a third party (Microsoft), as is the case with all major face-offs?


  • It’s hard NOT to think that Google is “using and abusing” Yahoo.
    Of course, Yahoo got themselves into this mess in the first place – so I certainly hope they’ve got a plan to recover from this. Now’s a great time for Microsoft of some other party to swing into position – unfortunately, I don’t see that happening.
    The timing is very interesting though – I wonder if this same decision would have been made if the election went the other way – Is Google afraid of increased regulatory issues?

  • Chris Wood

    I think the owners of Google, agreed to help their friend Yang to avoid the MS takeover. Their agreement was contingent on it not costing Google very much.
    The second a lawsuit starts, it would cost to much and would be abandoned.


    One less monopoly to worry about…

  • John Flynn

    If XM and Sirius can get through anyone can.

  • Brian Davi

    The biggest thing to point out during this attempt for a partnership, is that Google has been very aggressive in the online market and this has been the first aggressive reaction by the competition to slow the rapid progression in their online dominance.

  • Frank Feather

    I think Google has come to realize, beyond any anti-trust issues, that Yahoo is basically worthless — certainly from the standpoint of its search capability — and that Google can effectively drive Yahoo Search out of business.
    Microsoft also says it is no longer interested in Yahoo, which means that its millions of group and e-mail users also are of limited value.
    I personally will be surprised if Yahoo still exists within 2 years.

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