Google, Yahoo! Call Off Ad Partnership

Concerns by government regulators, advertisers cited as reason for not completing deal.

Google is calling off its search advertising partnership with Yahoo! "It's clear that government regulators and some advertisers continue to have concerns about the agreement," said Google senior VP, corporate development and chief legal officer David Drummond in a blog post Wednesday.

The companies announced back in June that they had struck a deal to give Yahoo! the opportunity to use Google to service ads on its Web sites, but the deal got pushback from advertisers concerned it would boost prices and competitors in the online search business, notably Microsoft, which complained the companies would be cornering the market on search advertising.

The deal also drew the scrutiny of concerned legislators and the Justice Department, which was investigating the potential partnership.

"Pressing ahead risked not only a protracted legal battle but also damage to relationships with valued partners. That wouldn't have been in the long term interests of Google or our users, so we have decided to end the agreement," wrote Drummond, likening continuing to fight for the deal to driving down the info highway with the parking break on.