Yahoo! is Upset, as Google Terminates Ad Pact
Pressed under regulators’ resistance, Google has decided to terminate
its ad services agreement that it signed with Yahoo! in June. Yahoo! is
disappointed saying that Google has elected to withdraw from the
agreement rather than defending it in court.
In
June, says Google, Google signed an advertising agreement with Yahoo!
that gave Yahoo! the option of using Google to provide ads on its
websites (and its publisher partners' sites) in the U.S. and Canada. At
the same time, both companies agreed to delay implementation of the
agreement to give regulators the chance to review it.
We feel that the agreement would have been good for publishers,
advertisers, and users -- as well, of course, for Yahoo! and Google,
says
David Drummond, senior VP Corporate
Development and chief legal officer, on his Google blog post.
However, after four months of review, including discussions of various
possible changes to the agreement, it's clear that government regulators
and some advertisers continue to have concerns about the agreement.
Pressing ahead risked not only a protracted legal battle but also damage
to relationships with valued partners. That wouldn't have been in the
long-term interests of Google or our users, so we have decided to end
the agreement, writes David
Drummond.
In
response to Google’s decision to withdraw, Yahoo! said in a press
statement that Google notified Yahoo! of its refusal to move forward
with implementation of the agreement following indication from the
Department of Justice (DOJ) that it would seek to block it, despite
Yahoo!'s proposed revisions to address the DOJ's concerns.
Meanwhile, the U.S. Department of Justice has also notified that Yahoo!
and Google abandoned their advertising agreement after the Department of
Justice informed the companies that it would file an antitrust lawsuit
to block the implementation of the agreement.
“The
companies' decision to abandon their agreement eliminates the
competitive concerns identified during our investigation and eliminates
the need to file an enforcement action," said Thomas O. Barnett,
Assistant Attorney General in charge of the Department's Antitrust
Division. "The arrangement likely would have denied consumers the
benefits of competition -- lower prices, better service and greater
innovation."
