Google calls off ad deal with Yahoo

Google has called off a search-ad partnership with Yahoo! that would have resulted in huge revenue for Yahoo! After four months of rigorous review, and discussions of various possible changes that needed to be made to the agreement, Google called off the deal. It said that government regulators and certain advertisers were not too positive about the agreement. To save the long term interest of the stakeholders of Google, the search giant has pulled the plug on the deal, a spokesman said.

Yahoo is obviously unhappy. Yahoo! Bosses feel that Google should have defended the deal in court instead of pulling out. The news caused the share prices of Google to further take a blow. When Yahoo! and Google announced the deal about a search-ad in June, Yahoo! said it would create $800m and $250m to $450m in incremental operating cash flow in the first 12 months of operation.

According to the deal, Yahoo! would have placed Google ads on some Yahoo! search results, and the revenue was supposed to be shared. The deal would have helped Yahoo! show ads on pages where its own technology - Panama, was not able to provide results.

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