Recently the deal between Google and Yahoo, the biggest companies in the Internet search market, has been put off due to extended regulations coming from the government. The deal awaited the decision of The US Department of Justice for a while and after the conditions were set, Google didn’t approve and the whole deal ceased to exist. The deal between the two Internet giants would have consisted in Google advertising on Yahoo search pages, a partnership that would have brought Yahoo hundreds of millions of dollars. Unfortunately, the deal was considered by many to violate the antitrust law, thus creating a monopoly. The antitrust law defends the rights of consumers and has as a main purpose ensuring entrepreneurs that they have a market on which they compete. A company holding a monopoly would be able to lower or raise prices at anytime, make for an uncompetitive environment which can, ultimately, lead to stagnation and the depression of economy.

The antitrust law consists of three main elements that consist of prohibiting any agreements that could restrict free trading and competition, banning abusive behavior of a firm or company and supervising the agreements and mergers between large companies. The deal between Google and Yahoo has been widely discussed in the media, with the pros and cons. Advertisers were afraid that if the partnership took place, prices would go up really fast with nothing they could have done about it, while Yahoo claiming that there is not sufficient understanding of how affairs on the Internet work.

Google’s move to withdraw from the advertising alliance was seen as a setback to both companies, but especially to the ailing Yahoo, which had hoped to book as much as 450 million dollars per year in added operating income by running Google's more lucrative ads next to its own search results.

"After four months of review, including discussions of various possible changes to the agreement, it's clear that government regulators and some advertisers continue to have concerns about the agreement," David Drummond, Google's chief legal officer, wrote on the company's blog.

Noting that several major advertisers had objected to the deal, Drummond added: "Pressing ahead risked not only a protracted legal battle but also damage to relationships with valued partners. That wouldn't have been in the long-term interests of Google or our users, so we have decided to end the agreement."

Yahoo had identified the alliance as a major strategy initiative, after it rejected a 47.5-billion-dollar takeover offer from Microsoft earlier this year. The company's stock has since plummeted from about 30 dollars to 14 dollars, and Yahoo said Wednesday that it was disappointed by Google's decision.

"Yahoo continues to believe in the benefits of the agreement and is disappointed that Google has elected to withdraw from the agreement rather than defend it in court," Yahoo said in a statement.

At the Web 2.0 Summit in San Francisco, Yahoo made a pretty shocking statement claiming that the deal with Google, though important for the company, wasn’t extremely crucial as Yahoo is on the market to innovate and to win. The failed deal is only a minor drawback for the giant Internet search company and there are many other possibilities around. Another possibility could be, of course, Microsoft purchasing Yahoo, a merger that may even threaten today’s undisputed leader, Google.

Microsoft tried purchasing Yahoo a while ago but the negotiations failed, the price of $40 billion dollars being not enough for Yahoo. Microsoft backed out from the negotiations and Yahoo continued being an independent company. Jerry Yang stated at the Web 2.0 Summit that the best thing for Microsoft would be to buy Yahoo. This means that Yahoo might just reconsider its status if negotiation could take place again. Yang also declared that Yahoo is still very important on the market and that it will continue to invest further in innovative technologies.