After Microsoft opted for a bid for Yahoo in February, Google and Yahoo began several conversations to see if Google could help Yahoo to remain independent. Thus came the advertising agreement which the two companies signed in June. This deal was supposed to deliver Yahoo $250 million to $450 million in additional operating cash flow in the first year.

However,Google chose to abandon this controversial deal after the Justice Department notified the companies that it would file an antitrust suit to block it.
Google's Chief Executive Eric Shmidt said in an interview which was posted in a blog,"We canceled the deal with about one hour to go before a lawsuit was going to be filed against our deal. We concluded after a lot of soul-searching that it was not in our best interest to go through a lengthy and costly trial which we believe we ultimately would have won."

On the contrary,Yahoo said it would have preferred to defend the deal in court. "Yahoo strongly believes we would have prevailed in court if the Department of Justice had filed a lawsuit, but unlike Google, we were prepared to defend our agreement,"said Tracy Schmaler, a Yahoo spokeswoman in a blog.Yahoo's Chief Executive Jerry Yang said that he was upset that Google had chosen to walk away.

Labels: ad deal, google, seo news, yahoo

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