Internet giants Google Inc. and Yahoo Inc. have agreed to delay implementing an advertising partnership to give the United States’ Department of Justice time to finish investigating the proposed deal, San Francisco Chronicle reported on Saturday.
The decision marks an abrupt turnaround for Google CEO Eric Schmidt, who had recently said that he planned to start supplying ads to Yahoo’s search engine sometime in early October, even if federal regulators had yet to give their approval, according to the source.
The Yahoo headquarters in Sunnyvale, California. U.S. search engine Yahoo said Thursday it has reached an agreement with rival Google on Internet advertising partnership, which could boost its revenue by some 800million dollars.
In a statement issued on Friday, Google said: “When we announced our advertising agreement with Yahoo in June, we agreed to delay its implementation until October to give regulators time to look at the details. As we are still in conversation with the Department of Justice, we have agreed to a brief delay in implementing the agreement while those discussions continue.”
The two companies are now in an indefinite holding pattern, raising more questions about whether the government plans to try to prevent the No. 1 and No. 2 search engines from cooperating, said the Chronicle.
Last month, the Justice Department hired a private attorney to examine the partnership. Yahoo didn’t immediately respond to requests for comment. The deal faces stiff opposition from some major advertisers and ad agencies, which fear that it will result in higher prices for online advertising. Google and Yahoo have vigorously defended the partnership, saying that it will have no impact on prices and that it is structured in a way to avoid antitrust concerns.