Let’s call the whole thing off
Google is clearly not expecting a more lax regulatory environment under new President Barack Obama because only hours after Obama gave his victory speech it has decided not to bother with the proposed advertising agreement with fellow Internet search giant Yahoo!
The deal would have given Yahoo! the option of using Google to display ads on keyword searches it hadn't sold ads against itself. A similar deal already exists between Google and ask.com, but there were widespread concerns that a collaboration between the two companies that collectively own the vast majority of the US search market would harm competition.
After protracted negotiations with regulators and advertisers, Google decided it just didn't need the grief and has pulled out of the whole thing. Google couldn't resist pointing out that "We feel that the agreement would have been good for publishers, advertisers, and users -- as well, of course, for Yahoo! and Google."
Google's closing flourish managed to cleverly combine a simile and a metaphor in one conveniently sized flounce: "We're of course disappointed that this deal won't be moving ahead. But we're not going to let the prospect of a lengthy legal battle distract us from our core mission. That would be like trying to drive down the road of innovation with the parking brake on," pouted David Drummond, senior VP of corporate development and chief legal officer at Google.
Yahoo! doesn't seem too happy with Google's decision. "Yahoo! continues to believe in the benefits of the agreement and is disappointed that Google has elected to withdraw from the agreement rather than defend it in court," said Yahoo! in a press release.
The press release then went on to say words to the effect that everything else was still going according to plan. Yahoo! shareholders might beg to differ, but its share price was up seven percent at time of writing, perhaps on the hope that Microsoft might now renew its interest.
UPDATE - 11:00 6th November 2008: It turns out that the US Department of Justice had informed Google and Yahoo! that it would file an antitrust lawsuit against them if they'd proceeded with the deal.
