Google and Yahoo Prepare to Walk Away from Ad Alliance

03 November 2008

MOUNTAIN VIEW, California: Evoking memories of the tear-jerking farewell between Ingrid Bergman and Humphrey Bogart in Casablanca, insiders say that inamoratas Google and Yahoo will this week turn away from their proposed ad alliance – sundered by La Forza del Destino, or the US Justice Department as it is more commonly known.

Following reportedly terse meetings last week with Justice representatives, the betrothed search giants respectively issued palliative statements.

Google continues to have "cooperative discussions with the Department of Justice about this arrangement," said spokesman Adam Kovacevich. "We are confident that the arrangement is beneficial to competition, but we are not going to discuss the details of the process."

While Yahoo spokestress Tracy Schmaler ventured only that discussions with Justice were "ongoing," adding, "we believe strongly that this agreement will strengthen Yahoo's competitive position." 

An approved deal would allow Yahoo to display search ads sold by Google and take a cut of the revenue – an arrangement which immediately drew criticism from sources that varied from the US Association of National Advertisers to Microsoft.

According to insiders, the DoJ has laid down a number of caveats unacceptable to the search twosome – the most onerous of which is that they sign a 'consent decree' itemizing the terms of the partnership.

Such a document would subject their compliance with the terms of the decree to ongoing  oversight by a judge.

Crunch time, say the moles, will come later this week.

Data sourced from Wall Street Journal Online; additional content by WARC staff