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Google, Yahoo offer new terms for alliance

Associated Press / November 4, 2008
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SAN FRANCISCO - Google Inc. and Yahoo Inc. have reportedly submitted a list of concessions that would restrict their proposed Internet advertising partnership to appease antitrust regulators.

The companies offered revisions to the Justice Department during the weekend, according to The Wall Street Journal's website. The Journal said Google and Yahoo are willing to limit the amount of revenue generated from the partnership and shorten its duration. Google's advertising customers would be given the option to not have their commercials appear on Yahoo's website.

Yahoo would be limited to getting no more than 25 percent of its search advertising revenue from Google, and the partnership would expire after two years. The original contract, signed in June, spanned 10 years and didn't have any restrictions on how frequently Yahoo could draw upon Google's technology for displaying ads alongside its search results.

Yahoo had estimated Google's system would enable it to boost its revenue by $800 million annually, but the restrictions would cut that in half.

Google and Yahoo declined to comment but confirmed they remain in talks with Justice.

Regulators have been examining Yahoo's proposed reliance on Google's technology because the two companies combined control more than 80 percent of the US search advertising market.

Microsoft Corp. and the Association of National Advertisers, among others, have argued the arrangement would enable Google to gradually increase advertising prices and exert more control over e-commerce.

Google had vowed to launch the partnership by mid-October, but backed off to avoid a legal battle that would have focused on the market power that Google has been accumulating while running the Internet's most profitable advertising network.

Yahoo is under pressure to boost its sagging profits after rejecting a $47.5 billion takeover offer from Microsoft six months ago.

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