Google Withdraws from Deal with Yahoo

November 5, 2008
Lexero LLC

 

In a move that should surprise no one, Google and Yahoo have “officially” abandoned their proposed Internet advertising partnership.

The proposal was laughable from the start, but the two firms took the public stance that the arrangement could somehow have been “pro-competition.” Antitrust regulators were having none of it. As it became clear that the proposal would not simply slide past regulators Google and Yahoo have likely determined that the façade was no longer worth the trouble and legal fees.

As previously noted, it seems unlikely that either party truly thought this would pass antitrust muster. There were potential latent benefits to each, however, which may have led to the proposal’s birth.

While there was little question the proposal had little chance of success, one might wonder if the Obama victory just hours before the firms’ announcement played a role. There was little hope that an Obama administration would be more willing to allow the deal than the outgoing Bush administration. The election may have been the final proverbial straw on the back of this failed-from-the-start alliance.


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