Google has abandoned its partnership with Yahoo, after learning US anti-trust officials planned to oppose the deal in court.
Under the abandoned deal, Google would have placed its advertisements on Yahoo searches, and the companies would split the revenue.
But the US Department of Justice (DoJ) told Google yesterday it intended to file a lawsuit to block the deal, citing concerns that Yahoo's competition would have been blunted significantly.
Google and Yahoo were rumoured to have changed the terms of the deal, drastically shortening the time-frame and limiting Yahoo's portion of the search revenue to 25%. But these adjustments were clearly to no avail.
Yahoo had been rumoured to have been looking to secure the arrangement with Google to fend off Microsoft's take-over aspirations. As a result, this announcement has sparked rumours that Microsoft is renewing its efforts.
But according to Reuters, insider sources have denied that Microsoft is in talks to buy Yahoo.