Google has abandoned its
advertising deal with Yahoo to avoid having a "protracted legal
battle" with US regulators.
The deal involved Google providing some advertising around
Yahoo's search results, and would have been worth around £495m a
year to Yahoo.
The deal was originally announced in June, but it has
faced anti-trust objections from Microsoft and web advertisers,
who felt it potentially limited the search web ad space.
Yahoo said its was "disappointed" that Google had chosen not to
stand and fight for the deal.
Yahoo was using the deal with Google to help placate
shareholders angry about the Yahoo board rejecting Microsoft's
recent takeover offer.
