Google and Yahoo could walk away from ad deal

Rumours after probs with US authorities

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31 October 2008 11:31 GMT / By Katie Scott

There are investigations on-going in the States and Europe, and mounting opposition, including concerns from US politicians, but it seemed Google and Yahoo were determined to push ahead with a controversial ad sharing deal.

But now the Wall Street Journal is reporting that the heat has got too much and both companies are ready to walk away from the deal.

The Journal, citing people in the know, claims that an announcement will be made mid next week and will point to the fact that the companies have been unable to reach an agreement with the US Department of Justice.

Google had announced earlier this month that it was going to delay the deal to give authorities time to investigate but now has the deal been scuppered?

Neither company are commenting directly.

Yahoo spokesman Tracy Schmaler told Reuters: "We believe strongly that this agreement will strengthen Yahoo's competitive position in online advertising and will help to drive a more robust, higher quality Yahoo marketplace for our advertisers, publishers and users".

Google spokesman Adam Kovacevich added: "We are confident that the arrangement is beneficial to competition, but we are not going to discuss the details of the process".