On Wednesday, after much speculation, Google (NASDAQ:GOOG) ended its controversial Internet search advertising deal with Yahoo (YHOO) that was originally announced in June of this year. Mountain View, Calif.-based Google described the departure as being amicable and recognized the fact that the deal was canceled as a result of pressure from
Apparently, Google didn’t have much choice but to withdraw from the pact to avoid having a tediously protracted legal battle with
Last week, both search giants scaled back the terms of their search advertising deal in what looked like a last-ditch attempt to get approval from U.S. regulators. Some analysts called it the Band-Aid deal, while others said it smacked of desperation.
Yahoo meanwhile, sees Google’s walking away from the agreement with dissatisfaction. In a statement, the company expressed its disappointment that Google had “elected to withdraw from the agreement rather than defend it in court.” For Yahoo, this is another major blow since it had expected to earn up to $450 million in operating cash flow annually from the deal.
Google for its part reiterated the fact that it would not allow the prospect of a legal fight to distract it from its core mission. The company is the runaway leader in Internet search advertising. Yahoo is a distant second.
The full statement by Google’s here.David Drummond on the matter can be found