Googe, Yahoo revise search ad deal to appease DOJ

Google and Yahoo have backed down off their previous alliance proposal in order to clear potential issues from the Dept of Justice Department and other companies such as Microsoft. Amidst growing executive uncertainty at Yahoo, the new report indicates that a revised version of the companies' original search agreement was submitted over the weekend to avoid a potential lawsuit by regulators. The Wall Street Journal report says that the revised agreement limits the amount of revenue Yahoo! can earn from the deal and also shortens the term of agreement substantially.

Regulators have been building a case to block the deal amid concerns that the search ad alliance would give Google an unfair monopoly over the online advertising industry and could distort advertising prices, the report claimed.

The updated agreement submitted by the online-ad giants over the weekend comes as the companies face mounting pressure by the government and critics to dump or change it. Under the newly proposed agreement submitted over the weekend, it limits the amount of money Yahoo can earn from the previously proposed open-ended agreement that allowed Yahoo to display search ads sold by Google and share the revenue.

According to the report, the revised agreement caps the amount of revenue Yahoo can generate from the deal to 25% of Yahoo's search revenue as well as shortens the term to two years (from up to 10 years). In addition, Google will also offer its advertisers an option to choose whether their ads can be displayed on Yahoo!.

Yahoo is also working to fill recently created executive vacancies, WSJ reported: on Monday, it announced that it has hired Jeff Dossett, an executive from Microsoft Corp., to take over its online media properties -- a position that was created when Scott Moore announced his departure for "different" opportunities.

Filed under: industry
Other story tags: Microsoft, Google, Yahoo, online advertising