Google Terminates Yahoo Advertising Partnership

Yahoo announced that Google has decided to terminate its advertising partnership with Yahoo, “following indication from the Department of Justice that it would seek to block it, despite Yahoo!’s proposed revisions to address the DOJ’s concerns,” the Yahoo press release stated.

While I understand Google does not want to add another legal battle, does this mark a pull back on the part of Google from their previous aggressive acquisition and partnership agenda?

The press release went on to state:

While the implementation of the services agreement with Google would have enabled Yahoo! to accelerate its investments in its top business priorities through an infusion of additional operating cash flow, this deal was incremental to Yahoo!’s product roadmap and does not change Yahoo!’s commitment to innovation and growth in search. The fundamental building blocks of a stronger Yahoo! in both sponsored and algorithmic search were put in place independent of the agreement.

Hopefully this will not further impact Yahoo or Google’s stock prices. Yahoo had announced a possible partnership/merger with AOL earlier this week but the loss of the Google partnership may now jeopardize that as well.

Barron’s Eric Savitz reported this could lead to another Microsoft offer – though one lowered to $20 a share – which I doubt Yahoo would entertain.

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