Google Leaves Yahoo! at the Altar; Antitrust Concerns Sink Partnership

Google has been trying to broker an ad partnership with Yahoo!, but tech’s potential power couple just can’t make it work. As predicted, Google called it quits today.

In June, Google announced their agreement with Yahoo!, which gave Yahoo! the option of using Google to supply ads on its Web sites. But after antitrust regulators investigated the plan, they found that the two strongest search engines would crush competition and notified the companies that they’d be filing a lawsuit. “Pressing ahead risked not only a protracted legal battle but also damage to relationships with valued partners,” wrote David Drummond, Google’s chief legal officer, on the company’s public policy blog. “That wouldn’t have been in the long term interests of Google or our users, so we have decided to end the agreement.”

The real loser in this breakup is Yahoo!, which dropped their merger with Microsoft to court Google, and is stalling in growth and revenue. As Henry Blodget notes at Silicon Alley Insider, Microsoft might approach Yahoo! again, with a much less sweeter deal than the one they offered this past summer. “And that’s if Microsoft comes back. Microsoft might just want to see if Yahoo just completely implodes,” he writes.