Google-Yahoo Put Partnership On Hold; Talks With DOJ ‘Continuing’
Yahoo (NSDQ: YHOO) and Google (NSDQ: GOOG) will suspend working together in order to give the Department of Justice more time to determine whether or not their ad search pact runs afoul of anti-trust laws AllThingsD reports, citing sources close to the situation. Yahoo spokesman Adam Grossberg confirmed that report for paidContent, saying, “The companies have agreed to a brief delay in implementing this agreement to continue our ongoing discussions with the Department of Justice. We have had discussions with regulators and look forward to responding to their questions about this agreement.”
—Google issued a similar statement: “When we announced our advertising agreement with Yahoo! in June, we agreed to delay its implementation until October to give regulators time to look at the details. As we are still in conversation with the Department of Justice we have agreed to a brief delay in implementing the agreement while those discussions continue.”
—Little choice but to delay: The deal was set to begin in the middle of this month, but with opposition mounting, the companies had little choice other than issuing a delay. On Thursday, Sen. Herb Kohl (D-Wisconsin), chair of the antitrust subcommittee, said that even if the DOJ does give Google-Yahoo the go ahead, the deal will still require close monitoring to ensure it doesn’t cross the line into a full violation of antitrust statutes. If the DOJ grants its assent to the partnership, the two companies will have over 80 percent of the search market. Microsoft (NSDQ: MSFT) has been lobbying Congress and regulatory officials hard against the deal, which Yahoo used to help block the software company’s efforts to take it over.
—Marketwatch: A DOJ rep declined comment, aside from saying that its “investigation is continuing.” It can sue to block the partnership or to change the terms of how Google and Yahoo ultimately operate. Google CEO Eric Schmidt has stressed the need to keep the terms intact, as they were intricately worked out over several months, implying it would be extremely difficult for the two to restructure.
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@davidaKaplan
Oct 3, 2008 4:38 PM ET
Posted In: Advertising, Legal, Regulatory, Search, Technologies / Formats, Companies, Google, Yahoo
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