Wednesday, November 05, 2008

A Slightly Smaller Google-opoly

This morning the Official Google Blog announced that Google is terminating their partnership with Yahoo. The original agreement called for Google to supply ads to Yahoo and Yahoo partner sites if Yahoo did not have ads to display for certain search queries. From the time the agreement was announced, there were concerns that this would result in a search advertising monopoly for Google. According to Hitwise, Google accounts for more than 68% of the search market, and Yahoo makes up almost 20%. These monopoly concerns, and possible government antitrust intervention, finally resulted in the dissolution of the Google/Yahoo partnership.

Today’s announcement is just the latest chapter in Yahoo’s recent troubled history. Within the past two weeks, Yahoo has announced that it will lay off 10% of its employees, and that it will discontinue its Y!Live service next month. Yahoo’s stock value has dropped significantly since Microsoft’s failed buy-out earlier this year. Today’s news will almost certainly re-open those conversations and result in many more months of stories about a potential Microsoft buyout.

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