Google, Yahoo scale back ad agreement in hopes of approval

By on November 4, 2008, 6:25 AM
Anticipating a negative answer from U.S. antitrust regulators, Google and Yahoo have proposed substantial structural changes to their advertising agreement that would let Yahoo use Google's more advanced and better performing ad platform to generate extra revenue from its search traffic and content websites.

The most visible changes in the updated agreement are caps that would limit Yahoo from generating over 25 percent of its revenue off the Google agreement. The new proposal has also reduced the term of the contract from ten years to just two.

For Yahoo this is just the continuance of a very intense year in which Microsoft heavily pursued the company for a billionaire takeover. The number two search engine finally rejected the offer alienating some of its investors. Meanwhile the company continued to lose ground to main competitor Google with whom is now almost forced into an agreement if they want to make room for a strong comeback.

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