Google Inc and Yahoo Inc have decided to delay implementing a controversial search advertising partnership, Yahoo said on Friday.
"The companies have agreed to a brief delay in implementing this agreement to continue our ongoing discussions with the (U.S.) Department of Justice," Yahoo said in a statement. "We have had discussions with regulators and look forward to responding to their questions about this agreement."
Google issued a similar statement.
"When we announced our advertising agreement with Yahoo in June we agreed to delay its implementation until October to give regulators time to look at the details. As we are still in conversation with the Department of Justice we have agreed to a brief delay in implementing the agreement while those discussions continue," the company said.
The delay was expected to last less than a month, a source familiar with the discussions on the issue told Reuters. "We're still looking at the time frame of October," the source said.
The deal, which allows Google to sell advertising for some of Yahoo's online advertising space, is unpopular with advertisers who fear higher prices. Google's web-search market share widened to 63 percent in August, while Yahoo dropped to 19.6 percent and Microsoft Corp slipped to 8.3 percent, according to comScore Inc.
Bob Liodice, president and CEO of the Association of National Advertisers, said his organization was opposed to the pact. "We're gratified that Google and Yahoo are delaying," he said.
Google uses an algorithm that aims to match consumers with what it says are the most appropriate ads, a formula some advertisers find mysterious and bothersome.
The deal announced in June to share advertising was widely seen as an effort to help fend off Microsoft's efforts to acquire Yahoo, by bringing Yahoo an additional $800 million in annual revenues.
An antitrust lawyer, who regularly brings mergers to the Justice Department, said that the delay was probably not a good sign for Google and Yahoo.
"It means that they were not going to get a clean bill of health in time, and perhaps it's much worse than that. They don't want to go forward and be told that there's potentially a very serious problem there," said the lawyer.
There had been previously been signs that the planned partnership was running into trouble with the Justice Department, in particular reports that the agency had brought on board top litigator Sandy Litvack to work on the deal.
Litvack was the department's antitrust chief under former U.S. President Jimmy Carter and Walt Disney Co's former vice chairman.
Google has argued the tie-up means Google and Yahoo could work together to improve the chances that consumers will be more likely to get ads for products they will want to buy — thus giving advertisers more bang for their buck. It has also said that since it sells its advertisements by auction that it has little control over prices.
What Are Cookies
As is common practice with almost all professional websites, our site uses cookies, which are tiny files that are downloaded to your device, to improve your experience.
This document describes what information they gather, how we use it and why we sometimes need to store these cookies. We will also share how you can prevent these cookies from being stored however this may downgrade or ‘break’ certain elements of the sites functionality.
How We Use Cookies
We use cookies for a variety of reasons detailed below. Unfortunately, in most cases there are no industry standard options for disabling cookies without completely disabling the functionality and features they add to the site. It is recommended that you leave on all cookies if you are not sure whether you need them or not, in case they are used to provide a service that you use.
The types of cookies used on this website can be classified into one of three categories:
- Strictly Necessary Cookies. These are essential in order to enable you to use certain features of the website, such as submitting forms on the website.
- Functionality Cookies.These are used to allow the website to remember choices you make (such as your language) and provide enhanced features to improve your web experience.
- Analytical / Navigation Cookies. These cookies enable the site to function correctly and are used to gather information about how visitors use the site. This information is used to compile reports and help us to improve the site. Cookies gather information in anonymous form, including the number of visitors to the site, where visitors came from and the pages they viewed.
Disabling Cookies
You can prevent the setting of cookies by adjusting the settings on your browser (see your browser’s “Help” option on how to do this). Be aware that disabling cookies may affect the functionality of this and many other websites that you visit. Therefore, it is recommended that you do not disable cookies.
Third Party Cookies
In some special cases we also use cookies provided by trusted third parties. Our site uses [Google Analytics] which is one of the most widespread and trusted analytics solutions on the web for helping us to understand how you use the site and ways that we can improve your experience. These cookies may track things such as how long you spend on the site and the pages that you visit so that we can continue to produce engaging content. For more information on Google Analytics cookies, see the official Google Analytics page.
Google Analytics
Google Analytics is Google’s analytics tool that helps our website to understand how visitors engage with their properties. It may use a set of cookies to collect information and report website usage statistics without personally identifying individual visitors to Google. The main cookie used by Google Analytics is the ‘__ga’ cookie.
In addition to reporting website usage statistics, Google Analytics can also be used, together with some of the advertising cookies, to help show more relevant ads on Google properties (like Google Search) and across the web and to measure interactions with the ads Google shows.
Learn more about Analytics cookies and privacy information.
Use of IP Addresses. An IP address is a numeric code that identifies your device on the Internet. We might use your IP address and browser type to help analyze usage patterns and diagnose problems on this website and to improve the service we offer to you. But without additional information your IP address does not identify you as an individual.
Your Choice. When you accessed this website, our cookies were sent to your web browser and stored on your device. By using our website, you agree to the use of cookies and similar technologies.
More Information
Hopefully the above information has clarified things for you. As it was previously mentioned, if you are not sure whether you want to allow the cookies or not, it is usually safer to leave cookies enabled in case it interacts with one of the features you use on our site. However, if you are still looking for more information, then feel free to contact us via email at [email protected]