Yahoo, Google to submit new revised ad deal to Justice Dept.

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Yahoo and Google is being reported to have submitted a revised version of their proposal to form an advertisement partnership to the US Justice Department anti-trust regulators, according to the Wall Street Journal – citing “people familiar with the matter”.

According to the newspaper, both parties have added new provisions to limit the “scope of the deal” in a bid to get the green light from the Justice Department. It also shortens the agreement from 10 years to two years, and caps the revenue that Yahoo can generate from the deal to 25 percent of Yahoo’s total search revenue. This also would see Google advertisers opting out of having their ads being displayed on sites Yahoo would be putting Google’s advertising.

Previously, Google and Yahoo – number one and two in the web ad market respectively – announced on October 3 that both parties would be delaying the alliance until October 22, allowing the regulators to have more time to make a decision. Yahoo was also expecting to generate hundreds of millions of dollars from the new deal in the first year alone, but now that is debatable.

Microsoft, who is third in the market, had been opposed to the deal, with its senior vice president and general counsel Brad Smith arguing that the new deal would effectively give Google "an unprecedented level of control over advertising for search on the Internet — up to 90 percent potentially of all search ads." Microsoft previously tried to buy Yahoo in February 2008, but it was rejected by the board of Yahoo.

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