Wednesday saw the Internet Company Google walking away from its partnership with Yahoo on advertising. According to Google, this move was initiated in order to avoid any legal issues with the Federal antitrust regulators who were moving to file lawsuit against the agreement.
There was a proposal to scale back agreement in a last minute saving bid over weekend and this is a big blow to both Yahoo and Google. Any action or move by the powerful Google will continue to be carefully scrutinized by the government and Federal regulators.
Yahoo is now left in the lurch and is trying to scramble a growth plan. This partnership was Yahoo’s bid to negate the alternative of a merger with Microsoft. Google should not have walked away and should have stood ground to defend the agreement in court according to Yahoo. Yahoo however added that it was not unduly concerned as it was well poised to effectively compete in the market of search advertising.
According to Google, a lot of effort was taken to convince the regulators but it did not persuade them. David Drummond, chief legal officer of Google said that in spite of various changes in the agreement to accommodate the concerns of the regulators and other advertisers during the past four months, they continued to be concerned and thus there was no other alternative but to walk out of the proposed partnership.
According to investors and analysts, this move could re initiate Microsoft to continue bidding for part or all of Yahoo.
