After it became clear that the Department of Justice would try to block the Google-Yahoo advertising deal, Google today announced that it has decided to walk away from the deal. Google was clearly not interested in a protracted legal battle that would potentially alienate its partners. In its own press release, Yahoo points out that the deal was only ‘incremental’ to its product roadmap, though Yahoo did not discuss the potential financial fallout from this announcement.
Is Microsoft Still Interested?
Now, of course, the specter of another round of rumors and announcements around a possible merger between Yahoo and Microsoft will rear its head once more. After all, the idea of the advertising deal with Google was born out of the perceived necessity to fend off a Microsoft takeover of Yahoo, and Microsoft itself lobbied against the Google-Yahoo deal in Washington.
However, it is also worth pointing out that, at this point, Microsoft itself might not have too much interest in acquiring Yahoo anymore. After all, Microsoft itself is now trying to transform its own business and a merger with Yahoo would only be a distraction at this point.
