Google may not want to go with antitrust restrictions when it comes to its proposed search-advertising deal with Yahoo.WASHINGTON
(Reuters) - Google Inc may decide to scrap its proposed partnership
with Yahoo Inc rather than accept government-imposed antitrust
restrictions on it, according to two sources familiar with the
companies' discussions.
"Are they more serious about walking away? Yes. Have they decided? I'm not sure," one source told Reuters on Friday.
"Yahoo wants the deal, and they're willing to have Google sign
anything at the Justice Department to have them do it," said the source.
A second source said that Google and Yahoo, Nos. 1 and 2 in the
Internet search market, could announce as early as Friday that the deal
had fallen apart.
Google and Yahoo representatives could not be immediately reached for comment.
Google and Yahoo delayed implementing the partnership announced in
June to allow the U.S. Justice Department to scrutinize it for
antitrust issues. Between them, Google and Yahoo had more than 80
percent of the web search market in August, according to comScore Inc.
The deal, which would allow Google to sell advertising for some of
Yahoo's online advertising space, has drawn fierce criticism from
advertisers, who fear higher prices.
Part of the impetus of Google's walking away could be Yahoo's talks
with Time Warner Inc about buying the content and advertising
operations of its AOL unit. Google initially struck the deal with Yahoo
as a way to fend off Microsoft Corp's unsolicited bid.
Yahoo and AOL are conducting due diligence to see what a combined
company would look like, another source previously told Reuters.
By collecting the revenue from placing Google ads along its search
results, Yahoo's cash flow could grow by $250 million to $450 million
in the first year of the deal, the companies had said in June.
The deal has since been mired in the regulatory process. In
September, the Justice Department hired Sandy Litvack, its former
antitrust chief and Walt Disney Co's former vice chairman, to consult
on its probe of the search deal.
(Reporting by Diane Bartz, editing by Gerald E. McCormick)
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