Google delays Yahoo ads deal

 

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By Stuart Turton

Posted on 6 Oct 2008 at 11:00

Google has delayed its proposed advertising tie-up with Yahoo, giving US regulators more time to investigate the implications of the deal.

Under the advertising plans, Yahoo will serve Google ads alongside its own search results in a deal thought to be worth $800 million to Yahoo annually.

The companies have attempted to dodge antitrust concerns by introducing an auction system for the ads, whereby Yahoo can display the ads of the cheapest supplier.

Competitors, including Microsoft, have expressed concerns that the deal will cede even more of the online advertising market to Google, which already dominates the US market with a 63% market share, according comScore, a Web audience measurement firm.

The companies voluntarily delayed the arrangement by three and half months to give the Department of Justice time to investigate. Eric Schmidt recently threatened to go ahead with the plans in early October regardless of whether approval had been given. However the company no seems to have dismissed that idea.

"When we announced our advertising agreement with Yahoo in June we agreed to delay its implementation until October to give regulators time to look at the details. As we are still in conversation with the Department of Justice we have agreed to a brief delay in implementing the agreement while those discussions continue," Google said, though it did not say how long the delay would last.

The EC is also investigating the partnership, despite warnings from the American Antitrust Institute not to block the deal and potentially force Yahoo into the arms of Microsoft.