Google and Yahoo! partnership to be scaled down

Google and Yahoo! are planning to scale back their proposed advertising partnership in an effort to appears the US regulators. The two companies have suggested reducing the deal to just two years and offering advertisers the opportunity to opt-out of the tie-up.

The deal, which was due to start last month, is still under investigation by government investigators, who are concerned the tie-up could be anti-competitive.

Google and Yahoo! has originally proposed a ten year partnership but is now suggesting shortening this to two years. They will also cap the percentage of search revenue that Yahoo can collect from Google to no more than 25%, and let Google advertisers opt out of being placed on Yahoo.

The revisions come after reports last week suggested that Google and Yahoo! may decide to walk away from the deal by the middle of next week, unless a last-minute decision is reached.

Both Google and Yahoo! have denied the speculation and say discussions are ongoing.

It is feared that if the partnership does go ahead, Google and Yahoo! would have control of over 80% of the online advertising marketplace in the US, making it almost impossible for other competitors to survive.

The US Department of Justice has been investigating the possible implications of the deal since it was originally agreed in June, but it is yet to rule on the case.

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