Speculation is growing that the Google-Yahoo ad deal may be dead in the water.

In recent weeks Google and Yahoo have been attempting to finish up an advertising deal meaning Google ads would be displayed on Yahoo search results.

Several advertisers and Microsoft raised objections to the deal. They feared that the partnership would limit competition, raise prices and reduce choices in the web advertising industry.

According to the deal both Google and Yahoo are looking at dropping the partnership due to the department of justice's investigation since June. It is rumoured that the DoJ wanted to impose restrictions on the deal and that both Google and Yahoo may not profit from it as much as they had hoped.

Sources at the deal said "The DOJ could file a complaint seeking a preliminary injunction on the agreement even as the parties assess their options. Antitrust lawyers said the government would have to clear a high hurdle to win a preliminary injunction. But it is even less likely that Google and Yahoo! would want to battle the government in court over such a controversial deal, particularly while the financial market is so precarious, the lawyer said."

Yahoo will announce it's Q3 results this evening on a conference call with investors. Coupled with the results will be an announcement of job losses and cost cuts. In recent days the number expected to lose their jobs was set at 3500.

Posted: Oct 21, 2008 10:12 pm