Search engine giant Google has scrapped the much talked about advertising services agreement with internet major Yahoo! primarily due to regulatory concerns.
The advertising deal announced in June would have given Yahoo! the option of using Google to provide advertisements on its websites and its publisher partners' sites in the US and Canada.
Google on Wednesday said government regulators and some advertisers continue to raise concerns over the pact with Yahoo!.
"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," the search engine giant said in a statement.
Meanwhile, Yahoo! said it is disappointed with the 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," the internet firm said in a separate statement.
It noted that Google notified of its refusal to move forward with implementation of the agreement following indication from the Department of Justice that it would seek to block it, despite Yahoo!'s proposed revisions to address the DOJ's concerns.
Saying that it was also disappointed to call off the deal, Google pointed out that the company is not going to let the prospect of a lengthy legal battle distract it. "... Google's continued success depends on staying focused on what we do best: creating useful products for our users and partners," it added.
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