Google, Yahoo delay search ad partnership

WASHINGTON (Reuters) - Google Inc and Yahoo Inc have decided to delay implementing a controversial search advertising partnership, Yahoo said on Friday.

"The companies have agreed to a brief delay in implementing this agreement to continue our ongoing discussions with the Department of Justice," Yahoo said in a statement. "We have had discussions with regulators and look forward to responding to their questions about this agreement."

The delay was expected to last less than a month, a source familiar with the discussions on the issue told Reuters. "We're still looking at the time frame of October," the source said.

The deal, which allows Google to sell advertising for some of Yahoo's online advertising space, is unpopular with advertisers who fear higher prices. Google's web-search market share widened to 63 percent in August, while Yahoo dropped to 19.6 percent and Microsoft Corp slipped to 8.3 percent, according to comScore Inc.

Bob Liodice, president and CEO of the Association of National Advertisers, said his organization was opposed to the pact. "We're gratified that Google and Yahoo are delaying," he said.

The deal announced in June to share advertising was widely seen as a effort to help fend off Microsoft's efforts to acquire Yahoo, by bringing Yahoo an additional $800 million in annual revenues.