Google and Yahoo Call Off Ad Deal, Government to Blame

Greetings Readers!

When I arrived at my Google Reader this morning, I saw a post on the Official Google Blog announcing that the ad deal between Google and Yahoo is off.  The reason?  Government.

Google claims that the deal was attracting too much attention from government officials and they wanted to avoid a drawn out legal battle since they can’t seem to get the feds to back off.  This of course is no surprise as the deal seemed to be attracting a ton of attention from day one.  While I can understand the fears that some had, I think its time to stop worrying about the companies and more about the consumer.

The deal would have been beneficial for both companies and the consumer.  Yahoo would have had better ad targeting, the consumers would see more relevant ads, and Google would have ran off with all the money.  A good deal all around.  Unfortunately, there seem to be some people that are worried about just how big Google is getting.  While I would agree they should probably be monitored from a distance, I have yet to see them do anything truly destructive, and until they do, I think the government should stay back and watch how things play out.

I am most curious to see what this ultimately does to the companies stock prices.  On the first news of the deal falling apart, Yahoo’s stock jumped nearly 5% while Google’s stock is down a little over 1%.  Yahoo says they wish Google would have defended the deal which seems a little strange since their stock skyrocketed on the news that the deal was killed.  I think this is the most interesting part of the entire ordeal, especially since the deal is dead.

Are you happy that the deal didn’t go through?  Who do you think stands to benefit by the deal falling apart?

Only time will tell how this affects the companies, but I still think they would have been better off having gone through with the deal.  I will continue to watch this story as it develops and blog or podcast as needed.