Yahoo, Google Try To Sweeten Search Deal For DOJ Approval

Yahoo (NSDQ: YHOO) and Google (NSDQ: GOOG) have revised the terms of their proposed search deal in a last-ditch effort to get it approved by the Justice Department, WSJ reports, citing sources “familiar with the matter.” The two companies submitted the revisions — which limit some of the deal’s scope — to the DOJ over the weekend, after negotiations about the partnership reportedly wound up in a stalemate last week.

Shorter terms and a revenue cap: The new plan dramatically cuts the partnership’s length — from 10 years as first posed to just two years now — and limits the amount of revenue Yahoo can generate from the deal to just 25 percent. Previously, there was no cap on how much revenue Yahoo could gain from the deal; the company had hoped to earn at least $250 million in incremental revenue within the first 12 months. So this measure is likely an attempt to appease opponents who argue that Yahoo would eventually give up selling search on its own completely.

Google advertisers can opt out: Companies running search ads on Google can opt out of having their links displayed on Yahoo sites. This part seems aimed more at agencies and trade organizations like the World Association of Newspapers that spoke out against the deal, for fear that it would reduce the amount of ad revenue that Google and Yahoo provide to their members’ sites.

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