Yahoogle! Deal Delayed Pending Discussions with Department of Justice

The Washington Post today reports that Google and Yahoo! will hold off on a controversial advertising deal, which has attracted the attention of the U.S. Department of Justice and European Union Antitrust Regulators.

The proposed advertising agreement between Yahoo! and Google has dominated the headlines in the last weeks. Most prominent has been Google maintaining that the deal will go ahead as planned, despite protests from various different regulators, members from the California delegation of the U.S. House of Representatives and the Association of National Advertisers.

The deal, originally scheduled to roll out early October, will be delayed for no more than one month during which the two companies will continue talks with the DOJ.

While most see the deal as a negative move for the market as a whole (read up on the protests from the Advertisers and California delegates here and here), CEO Eric Schmidt not only said that the deal was designed to meet government standards but hinted that the drama surrounding the antitrust investigation stems from Microsoft, which is apparently “busy helping everyone get upset about these things.”

Yahoo! also attempted to put competitors fearing a monopoly situation at ease, claiming the move was engineered to improve Yahoo!’s own business and that the company’s sponsored search connection with Google would ultimately shrink over time.

Yahoo! remained aloof about the possible delay, commenting, “We have had discussions with regulators and look forward to responding to their questions about this agreement.” However, Google squashed any doubts about the delay with its statement regarding the situation:

"The companies have agreed to a brief delay in implementing this agreement to continue our ongoing discussions with the Department of Justice."

If called off, the deal could put Yahoo! in an awkward position. Largely seen as a scapegoat from a Microsoft acquisition, the deal with Google is a necessary move for Yahoo! to retain a certain level of buoyancy in the market. If the deal were to fall through, the company may have no choice but to reconsider Microsoft’s offer.

(Via Washington Post)