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Report: Google, Yahoo! Delay Search Deal

The two companies reportedly are holding off on the deal until the Department of Justice completes its review.



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are reportedly holding off on their search deal to allow the Department of Justice more time to review it.

Google met with the Department of Justice Friday and reached an agreement, according to


, which first reported the story.

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Google issued a statement confirming the report.

"As we are still in conversation with the Department of Justice we have agreed to a brief delay in implementing the agreement while those discussions continue," the company said. It did not specify how long the delay would last.

A spokeswoman from the Justice Department would only confirm that an investigation is ongoing. Several state attorneys general are also looking into the search deal, along with the European Commission.

Google's Chief Executive Eric Schmidt had previously said that he planned to move forward with Yahoo! on Oct. 11. Both companies in June agreed to voluntarily wait three and a half months before following through with the arrangement in order to give the Department of Justice time to scrutinize it.

Under the terms of the partnership, Yahoo! would outsource some of its online search ads in the U.S. and Canada to Google, and in turn Google would share the revenues.

The two companies have been confident the deal does not violate any antitrust regulations since it is non-exclusive. That means Yahoo! can outsource its ads to anyone of its choosing, not just Google. It also means Yahoo! can select which types of ads it wants to turn over to Google.

But many advertisers have come out against the deal, saying it will drive up ad prices and cede more control of the search market to Google, which already has a 63% market share. Yahoo! trails behind with about 20%.


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- a distant third in the search market with a share of only 8% -- has also raised opposition to the deal. Earlier this year, the company had tried to acquire Yahoo! in an unsolicited bid but ultimately failed.