If Google and Yahoo go forward with their search partnership, they'll have to sign a consent decree. Which will mean, in part, that Google might have government inspectors crawling all over its books and business practices. And the Yahoo partnership certainly ain't worth that.
So Google's close to walking from the deal, says Jessica Vascellaro in the WSJ. Which means Yahoo's board members should probably get back on the phone to Microsoft about selling the search business:
The likelihood that Google Inc. and Yahoo Inc. will walk away from their planned search partnership has risen, say people familiar with the matter.
The two Internet companies have so far failed to reach an agreement on their partnership with the Justice Department, which has been building a lawsuit to block the deal. Following a meeting Thursday with the Justice Department, the companies could announce a decision to back away from the partnership -- or a last-minute resolution, if one is reached -- by the middle of next week, according to these sources...
The option to scrap the deal has been on the table before, but Google in particular has begun considering it more seriously recently as talks with the Justice Department haven't progressed. One sticking point has been the Justice Department's discussion of having the companies sign a consent decree enforcing the terms of the search partnership. By doing so, the parties would be subjecting their compliance with the agreement to ongoing oversight by a judge.
Kara Swisher intelligently guesses what the reason Google gave the WSJ some of this story is to ramp up pressure on the Justice Department to cave. Google doesn't need this deal, but Yahoo does (and if it doesn't get it, it's leverage to draw Microsoft into an alternative deal is nil.)
If that's the strategy, though, it's unlikely to work. Who, exactly, is going to complain to the Justice Department about blocking the Google-Yahoo deal? Yahoo shareholders? Not a particularly powerful constituency.
On February 28, Axel Springer, Business Insider's parent company, joined 31 other media groups and filed a $2.3 billion suit against Google in Dutch court, alleging losses suffered due to the company's advertising practices.
