Google has pulled out of a proposed ad deal with Yahoo! The alliance would have helped Yahoo! to fend off a Microsoft Yahoo takeover bid proposed by Microsoft, but antitrust concerns being investigated by the Department of Justice hampered the deal. Google announced on November 5, 2008 that they would no longer pursue an advertising agreement with Yahoo.Google Public Policy Blog: Ending our agreement with Yahoo! (November 5, 2008)

Though a partnership between Google and Yahoo would have been good for both companies, critics felt it would stifle competition and raise ad prices. Thomas Barnett, overseer of the Justice Department's antitrust division, said, "The arrangement likely would have denied consumers the benefits of competition - lower prices, better service and greater innovation."Miami Herald: Yahoo's fate unclear as Google abandons ad deal (November 5, 2008) The Department of Justice had informed the companies that it would file an antitrust lawsuit against Google and Yahoo if they pursued the deal, which would have meant a lengthy legal battle for both companies.Department of Justice: Press Release: Yahoo! Inc. and Google Inc... (November 5, 2008) In a statement on Google's Public Policy Blog, Chief Legal Officer David Drummond said "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." He added that Google was disappointed that the deal won't be moving forward.Google Public Policy Blog: Ending our agreement with Yahoo! (November 5, 2008)

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