Nov 3, 2008 6:06 pm US/Pacific
Google, Yahoo Make Concessions On Ad Deal
MOUNTAIN VIEW (AP) ―
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Google headquarters in Mountain View.
AP
Google Inc. and Yahoo Inc. have submitted a list of concessions that would deflate their proposed Internet advertising partnership to appease antitrust regulators threatening to block the alliance, according to a report published Monday.
The companies offered their revisions to the U.S. Justice Department during the weekend, according to a story on The Wall Street Journal's Web site.
Citing people familiar with the matter, the Journal said Google and Yahoo are now willing to limit the amount of revenue generated from the partnership and shorten the deal's duration. Google's advertising customers would also be given the option to not have their commercials appear on Yahoo's Web site.
Under the new plan, Yahoo would be limited to getting no more than 25 percent of its search advertising revenue from Google and their partnership would expire after two years. The original contract signed in June spanned 10 years and didn't have any restrictions on how frequently Yahoo could draw upon Google's technology for displaying ads alongside its search results.
Yahoo estimated Google's system would enable it to boost its revenue by $800 million annually.
Antitrust regulators have been taking a hard look at Yahoo's proposed reliance on Google's technology because the two companies combined control more than 80 percent of the U.S. search advertising market.
Microsoft Corp. and the Association of National Advertisers, among others, have argued the arrangement would enable Google to gradually increase advertising prices and exert more control over the flow of e-commerce.
Analysts have argued that it might not make much sense for Yahoo and Google to work together if they are forced to make too many concessions.
But Yahoo is under intense pressure to do anything possible to boost its sagging profits after inflaming its shareholders by rejecting a $47.5 billion takeover offer from Microsoft six months ago. Microsoft withdrew its $33-per-share offer after Yahoo co-founder Jerry Yang held out for more money.
Yahoo shares closed Monday at $12.75, down 7 cents.
(© 2009 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
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