Google Kills Yahoo Ad Deal

mytrip writes "Google has pulled the plug on on a search-ad partnership with Yahoo that would have given Yahoo major new revenue but that raised antitrust concerns. 'After four months of review, including discussions of various possible changes to the agreement, it's clear that government regulators and some advertisers continue to have concerns about the agreement,' said David Drummond, Google's chief legal officer in a blog post Wednesday."

This one confused me.

[fuzzyfuzzyfungus]

I'm not a huge Google booster, you won't see much more than spamtrap stuff in any of my Gmail accounts; but I don't really understand why this deal is seen as so serious. Yahoo has a fairly strong set of web properties, but mediocre advertising and search. Running Google ads sure isn't a long term vote of confidence in their own ad department; but Yahoo's ad space is quite valuable, and presumably they believe that they can do better as a site operator selling ad space. I'm not sure whether they are right or not; but it is at least plausible.

Am I missing something about this, or did the deal get shot down by some sort of outside pressure? (Is MS still involved in some corporate version of "It's complicated" here?)

Re:What This Means

[isBandGeek()]

It's extremely obvious with the 20/20 vision hindsight affords us that Yahoo should have taken Microsoft's offer. But the real question is: with the information that CEO Yang had at the time, was his decision reasonable?

Re:More economics terms

[walshy007]

so wait a second.. you think that when a company becomes very well off, they are obliged to give free services to whoever asks it of them?

I'm not sure what your smoking, but it must be good, google, like all capitalist companies, follow the almighty dollar.

or were to even, for some inexplicable reason, decide to close up shop tomorrow, the federal government should step in and ensure they remain doing their duty

so if company x decides to close down, the government should have the power to _force_ the company to still provide service? ... right, I like your choice of words 'doing their duty' makes it sound almost like they are an army deserter by not doing business.

Re:More economics terms

[mattytee]

the government could just nationalize it if needed.

Recent events actually make this seem likely. Even three months ago, I would have scoffed at the idea of the US government getting into the economy in that fashion.

But far likelier is the thing that kills most companies with fat market share -- new technology that renders Google's business model obsolete (the same way Google is killing newspapers), and/or the cost setup changing markedly (either makes it harder for Google to profit or easier for other firms to profit if they join the market).

Re:More economics terms

[Ed Avis]

I think the other poster is making a snarky point about the rescue of the banking system, and the support and pressure given by governments to banks across the world to make sure they continue lending.