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Google & Yahoo Dicker with Feds To Salvage Deal: WSJ

It may be necessary for the companies to put a cap on the number of Google ads that appear on Yahoo sites

Google and Yahoo may have to make changes to their controversial revenue-sharing ad deal if they hope to save it, according to a story in the Wall Street Journal Tuesday.

The companies delayed implementing the deal a couple of weekends ago until at least next Wednesday after it became increasingly clear that the Justice Department was building a lawsuit against it.

They are now in early-stage negotiations with the regulators, the paper said, hoping to sidestep litigation.

Google, in particular, has been publicly resistant to the idea of making any changes to the agreement, but concessions may be inevitable – unless of course Google decides to walk.

The Journal says the talks may not “resolve US objections or be acceptable to the two companies.”

It may be necessary for the companies to put a cap on the number of Google ads that appear on Yahoo sites, it said, and they may have deploy a reporting mechanism to ensure compliance.

That mechanism “could require the companies to disclose more about the mechanics of their closely guarded search-advertising technology than they want to,” the paper said.

And Yahoo, which would take a revenue hit if the deal were capped, may also have to pledge – perhaps unrealistically – to remain in the search ad business.

Any concessions could be expected to be memorialized in a consent decree filed with the courts and the Journal suggests that such an instrument, recognizing Google’s market power, could constrain its future activities and leave it open to private antitrust suits, say, oh, from Microsoft.

Given advertisers’ objections to the axis the DOJ is reportedly looking to ensure that ad rates don’t rise significantly.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025.

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