Google, Yahoo trying to delink!

31 October 2008

Internet search majors Google Inc and Yahoo Inc are on way to terminating their search deal amidst an ongoing regulatory review and fears expressed by advertisers that the partnership would lead to higher advertisement rates.

Google, reports said, is weighing plans to pull out of the deal as the government has put difficult conditions to avoid harming competition in the market for online advertising.

The two companies, which had, earlier this month, decided to delay implementing the controversial deal, struck in June, are likely to terminate the deal by the middle of next week, media reports quoted sources close to the development as saying.

Google and Yahoo have so far failed to convince the regulator, the US Department of Justice, on the legitimacy of their online advertising partnership.

The deal allows Google to sell advertising for some of Yahoo's online advertising space. Google and Yahoo together owned more than 80 per cent of the internet search market in August.

Yahoo said the partnership with Google will help strengthen its competitive position and deliver better quality for advertisers, publishers and users. Google also complemented the deal saying it would drive competition, but it did not elaborate.