Cool, there will not be a monopoly created- until the next scheme deal.

Faced with the prospect of a lawsuit by federal antitrust authorities, Google decided to pull the plug on its proposed search ad deal with Yahoo. “After four months of review, including discussions of various possible changes to the agreement, it’s clear that government regulators and some advertisers continue to have concerns about the agreement,” Google’s chief legal officer, David Drummond, wrote on the company’s blog Wednesday. “Pressing ahead risked not only a protracted legal battle but also damage to relationships with valued partners.”

The deal called for Google to power some paid search ads for Yahoo. The companies estimated that the arrangement, forged to fend off Microsoft’s takeover bid for Yahoo, would have increased Yahoo’s revenue by around $800 million in the first year. When they announced the deal in June, they said they would delay it for four months, to give the federal authorities time to investigate.

Wednesday, after the companies announced the deal collapsed, the Department of Justice said it would have sued to block the arrangement. “Google and Yahoo would have become collaborators rather than competitors for a significant portion of their search advertising businesses, materially reducing important competitive rivalry between the two companies.”

After the deal unraveled, Yahoo said it was “disappointed” that Google “elected to withdraw from the agreement rather than defend it in court.”

Ref: MediaPost

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