Google and Yahoo! Propose Scaled Back Deal
UPDATE: as of November 6, the proposed deal between Google and Yahoo! is officially dead.
Perhaps in a last ditch effort to appease the Department of Justice, Google and Yahoo! have submitted a revised agreement that limits the scope of their proposed partnership. Under the new terms of the deal, the length of the agreement is only two years, instead of as many as ten. Additionally, Yahoo! would only be able to receive 25 percent of its total web search sales from the deal with Google.
Although there is no guarantee that this revised proposal will be enough to alleviate the concerns of the DOJ, it does represent somewhat of setback for both companies. Yahoo!’s additional operating cash flow would be more limited and Google would not be able to exert as much power as it would like. Even so, after release of the news, the stock price of both companies saw an increase.
