Yahoo! and Google may abandon ad deal

WASHINGTON, Oct. 31 (UPI) -- Partnership talks between U.S. Internet giants Google Inc. and Yahoo! Inc. may be nearing an unsuccessful close at the Department of Justice, sources said.

The two companies are conducting ongoing meetings with government officials, where talks appear bogged down, The Wall Street Journal reported Friday.

The Justice Department has requested the Internet companies sign a consent agreement, which would make their advertisement partnership subject to continuous judicial review -- one of the sticking points in the discussions, the Journal said.

If approved, the deal would allow Yahoo! to post Google ads in return for a percentage of the ad revenue. But, critics have said Google would then control an unfair portion of the online advertisement business.

"We are confident that the arrangement is beneficial to competition, but we are not going to discuss the details of the process," Google spokesman Adam Kovacevich said.

While Yahoo! stands to lose a lucrative arrangement, initiated while Microsoft Corp. was pursuing the company, walking away from the partnership would allow it to explore other options, such as a partnership with Time Warner Inc.'s AOL, the Journal reported.