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Goohoo! rejiggers monopoly expansion pact

Anything but government oversight

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In an effort to win the approval of the Department of Justice, Google and Yahoo! have (apparently) sent regulators a revised version of their monopoly-expanding search advertising pact.

Over the weekend, according sources speaking to The Wall Street Journal, the search market's number one and number two players submitted new papers that would shorten their pact from ten years to two and decrease the income cap from infinity to 25 per cent of Yahoo!'s total search revenue.

The Journal also says that the revised plan would give Google advertisers the option of barring their ads from Yahoo!'s search pages.

Google and Yahoo! announced their search ad deal in mid-June, on the same day that Jerry Yang told the world that Microsoft acquisition talks were officially dead. Under the pact, Google would serve ads onto Yahoo! search pages in the US and Canada by way of its AdSense for Search program.

The two companies had tested the arrangement earlier in the year - while Yang was still fighting off Ballmer's entreaties - but they delayed the full roll-out until October 11, so that regulators could give it a once over. October 11 came and went without DoJ approval, and despite earlier talk from Google CEO Eric Schmidt that the deal would go ahead anyway, he eventually caved, agreeing to a further delay.

Late last week, The Journal reported that the two search outfits were on the verge of walking away from the deal. Apparently, the DoJ was asking for a consent decree that would saddle the deal with ongoing government oversight, and Goohoo! didn't like that.

But now it seems that Google and Yahoo! have come back with another. Anything to avoid government oversight, it seems. But more on that later.

Needless to say, Google already owns a search advertising monopoly, controlling at least 60 per cent of the market, according to the latest numbers from comScore - and perhaps more. According to comScore numbers, Yahoo! controls over 20 per cent. ®

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