Google to Yahoo: It's Not You, It's Me

This deal just wasn't in the cards.

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Google's search advertising deal with Yahoo is finito, Google said in a blog post this morning:

After four months of review, including discussions of various possible changes to the agreement, it's clear that government regulators and some advertisers continue to have concerns about the agreement. Pressing ahead risked not only a protracted legal battle but also damage to relationships with valued partners. That wouldn't have been in the long-term interests of Google or our users, so we have decided to end the agreement.

Sounds like an old-fashioned breakup to me. Translation: The powers that be wouldn't understand this crazy, mixed-up relationship. Neither would my buddies.

Yahoo's response:

Yahoo! continues to believe in the benefits of the agreement and is disappointed that Google has elected to withdraw from the agreement rather than defend it in court.

Translation: I'm not boiling any rabbits over here, but you're not the search giant I thought you were!

Google:

We're of course disappointed that this deal won't be moving ahead. But we're not going to let the prospect of a lengthy legal battle distract us from our core mission. That would be like trying to drive down the road of innovation with the parking brake on. Google's continued success depends on staying focused on what we do best: creating useful products for our users and partners.

Translation: I totally feel bad about this, but you can't cage this bird...

It's just a matter of time until Microsoft sidles up, but its offer will probably be "significantly worse" that what Yahoo walked away from this summer, says Silicon Alley Insider.

The impact on Google...is minimal. The reason the company walked, we suspect, is that it realized that subjecting itself to litigation and/or a consent decree would hurt its business and image a lot more than barely material revenue and share gain from the Yahoo deal would help it. Yahoo is the big loser here.