Google and Yahoo deal is off

They thought it was all over ... well it is now

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5 November 2008 17:13 GMT / By Katie Scott

It was looking like a "will they, won't they" saga that could easily have matched the shenanigans between Microsoft and Yahoo, but now the ad sharing deal between two of the Internet's biggest players is off.

Google and Yahoo have confirmed that the deal, which was estimated to have the potential to boost Yahoo's revenue by up to $800m (£495m), has now been taken off the table.

Just this morning, the two companies were reported to have approached the US Department of Justice with a scaled down deal following on from widespread antitrust concerns both Stateside and over in Europe.

In the States, a pressure group formed to fight the deal, and, more recently, senators have waded in voicing their concerns.

Google put the deal on ice in early October to give authorities more time to consider the antitrust implications, but now, it seems it was Google which decided enough was enough.

Yahoo has been left disappointed and facing an uncertain future as its execs were relying on the deal to appease shareholders still angry at its repeated rejection of Microsoft's advances.

Yahoo has released a statement saying that it "continues to believe" in the benefits of the agreement and "is disappointed that Google has elected to withdraw from the agreement rather than defend it" during the Justice Department's probe.

Yahoo added: "While the implementation of the services agreement with Google would have enabled Yahoo to accelerate its investments in its top business priorities through an infusion of additional operating cash flow, this deal was incremental to Yahoo's product roadmap and does not change Yahoo's commitment to innovation and growth in search".