Over Before It Started: Google and Yahoo Search Ad Deal Canceled

Google is ending its search advertising partnership with Yahoo. It was never even implemented. Concerns over antitrust issues rose fast and furious since Google + Yahoo = an enormous chunk of the search ad market.

Groups of advertisers spurred on by Microsoft lobbied the Department of Justice to oppose the deal. But they might have just facilitated the search market going from 5 major engines to 4, providing less competition.

Yahoo is in dire straits and desperately needed this influx of cash. It’s looking more and more likely that their stock could drop (fairly or unfairly) to single digits, at which point Microsoft could get a great deal on a company they once offered $31 a share for.

Take that number 4 and reduce it to 3 if a Yahoo-AOL merger occurs before the (inevitable?) acquisition.

Both Google and Yahoo are saying that the cancellation of the deal won’t affect their commitment to search innovation.

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