Google and Yahoo will postpone their internet advertising partnership until goverment regulators complete a review on whether the deal will hurt competition.The companies agreed to delay while discussions with the Justice Department continue.
Competitors, consumer advocates and customers questioned whether the deal would give Google too much control over advertising and information on the Web. Increased scrutiny by regulators could limit Google's growth, said an analyst in New York.
No date is set for the probe to conclude, said a person with knowledge of the decision, who asked not to be named because the talks are private. Google, which handles almost two- thirds of U.S. Internet searches, sought to sell ads alongside some query results on Yahoo's site, splitting the revenue.
If the companies proceeded before the review is complete, the Justice Department could have sought an injunction, said another analyst in Washington. Google and Yahoo have said they don't legally need the agency to approve the agreement.
The plan raised eyebrows as soon as it was announced in mid-June because Google and Yahoo together handle more than 80 percent of U.S. Web searches. Google accounted for 63 percent in August, compared with 19.6 percent for Yahoo and 8.3 percent for Microsoft.
The two companies said June 12 they would give the Justice Department 3 1/2 months to review their partnership.
Yahoo Chief Executive Officer Jerry Yang, chose the Google accord after rejecting Microsoft's takeover advances earlier this year. In August, investors withheld about one-third of their votes for Yang's re-election to the board in a demonstration of their displeasure.
Microsoft has opposed the deal, saying it will give Google 90 percent of the search-based ad business. Yahoo needs the Google agreement to offset the slowing online advertising market.
The Association of National Advertisers trade group opposed the deal, saying it would push ad prices higher. The American Antitrust Institute, a Washington advocacy group, called for restrictions to limit Google's control of the market.
