Yahoo, Google to walk away from search deal

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San Francisco, Oct 31: Failing to reach an agreement with the US Department of Justice on implementing search advertising partnership, Google Inc and Yahoo Inc have decided to announce a decision to walk away from their search deal by the middle of next week, a media report said, citing people familiar with the matter. Earlier this month, the companies said they had decided to delay implementing the controversial deal, struck in June, due to ongoing discussions with regulators. The deal, which allows Google to sell advertising for some of Yahoo's online, advertising space, has drawn fierce criticism from advertisers, who fear higher prices.

Google and Yahoo together owned more than 80 percent of the web-search market in August, according to comScore Inc. A source said at the time that the delay was expected to last less than a month.

But following a Thursday meeting with the Justice Department, the companies could decide to back away or announce a last-minute resolution -- if one is reached -- by next week, the Journal reported. Yahoo spokesman Tracy Schmaler said discussions between the two companies are ongoing and they are working with regulators.

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