12/06/2008 05:12 am ET Updated May 25, 2011

Google-Yahoo Deal Struck Down By Department Of Justice

The Justice Department said Wednesday that the Google/Yahoo ad search deal would have made the two companies "collaborators rather than competitors" and left little doubt that regulators would have filed suit to prevent the partnership from ever happening.

Google's decision to unilaterally withdraw its proposal "eliminates the competitive concerns identified during our investigation and eliminates the need to file an enforcement action...," the DoJ said in a statement. "The arrangement likely would have denied consumers the benefits of competition --- lower prices, better service and greater innovation," it said.

Google first proposed the deal on June 12 and voluntarily delayed implementation four months to give regulators time to vet it. It repeatedly said it would implement it with or without DoJ pre-approval. Then as its October deadline came and went, Google said it would delay further -- but not indefinitely. This week Google proposed new terms to try to assuage Justice, but apparently that was not enough and it decided to take its ball and go home.

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