Google pulls out of Yahoo advertising partnership

Google and Yahoo have scrapped their Internet advertising partnership, abandoning attempts to overcome the objections of antitrust regulators and customers who believed the alliance would give Google too much power over online commerce. The retreat announced Wednesday represented another setback for Yahoo, which had been counting on the Google deal to boost its annual revenue by $800 million and placate shareholders still incensed by management's decision to reject a $47.5 billion takeover bid from Microsoft nearly six months ago. Without Google's help, Yahoo now may feel more pressure to renew talks with Microsoft and ultimately sell for a price well below the $33 per share that Microsoft offered in May. Yahoo shares traded Wednesday morning at just $13.67, up 2.4 percent on the day. Surrendering the chance to sell ads on Yahoo's popular Web site won't be a significant financial blow for Google, which already runs the Internet's largest and most prosperous advertising network. But the capitulation marks a rare comedown for Google, which had been insisting for more than four months that the Internet would be a better place to do business if it were allowed to work with Yahoo. "For the first time, Google has run into real opposition to its marketplace goals," said Jeff Chester, executive director of the Center for Digital Democracy, a consumer advocacy group. "Google is aware that its aggressive moves in the online advertising business are potentially contributing to damaging its brand. The perception of Google has changed."

More links:

Google Won't Pursue Yahoo Ad Deal (NYTimes)
http://www.nytimes.com/2008/11/06/technology/internet/06google.html?ref=...
Google Ditches Ad Pact With Yahoo (WSJ)
http://online.wsj.com/article/SB122589788640401601.html?mod=todays_us_ma...
Google Scuttles Ad Deal with Yahoo (WashPost)
http://www.washingtonpost.com/wp-dyn/content/article/2008/11/05/AR200811...
Google drops partnership with Yahoo; now what? (USAToday)
http://www.usatoday.com/printedition/money/20081106/2b_google06.art.htm
Yahoo back in hot water after Google pulls out of partnership (LATimes)
http://www.latimes.com/business/printedition/la-fi-yahoo6-2008nov06,0,37...
Google pulls out of Yahoo ad deal, reviving hopes of Microsoft linkup (SJ Merc)
http://www.siliconvalley.com/ci_10905600
Google-Yahoo: Unintended Consequences (BusinessWeek)
http://www.businessweek.com/technology/content/nov2008/tc2008115_251659....