Last June, Google and Yahoo announced a partnership where Yahoo would use Google Advertising on its site to increase revenue. Yahoo would raise some much needed cash from the more effective advertising, while Google publishes its ads on a very large site. Currently Yahoo uses its own advertising framework which is less effective.
However, today we learn that the deal is going bust because too many government regulators and advertisors had concerns that this agreement would give Google too much of an advertising monopoly.
The problem is that Yahoo as a company is in trouble. After the failed Yahoo takeover by Microsoft, Yahoo’s stock is off by 60% of its high this year.
Without this deal, could Yahoo be forced to shrink or even die? Is killing off Yahoo really worth the risk of a Google monopoly?
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