November 5, 2008 1:12 PM
DOJ Says Google, Yahoo Ad Deal A No-Go
Posted by Brian Baxter
"[A]fter 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," wrote Google senior vice president and chief legal officer David Drummond on the company's public policy blog. "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 decided to end the agreement."
Yahoo had sought out Google as a partner several months ago as a means of fending off an unsolicited $45 billion bid by Microsoft. The former had enlisted a team of lawyers from longtime outside counsel Skadden, Arps, Slate, Meagher & Flom to fight Microsoft's takeover attempt. Along with lawyers from Latham & Watkins and Hunton & Williams, Skadden continued to represent Yahoo in advocating for regulatory approval of the partnership with Google. (Microsoft turned to antitrust rainmaker Charles "Rick" Rule from Cadwalader, Wickersham & Taft to work on blocking the Google-Yahoo ad accord.)
Google relied on the advice of outside antitrust lawyers from Cleary Gottlieb Steen & Hamilton and Wilson Sonsini Goodrich & Rosati. (You can find a full listing of all the lawyers retained on the failed Google-Yahoo ad deal in this Am Law Daily post from October 14.)
Meanwhile, the Justice Department's assistant attorney general for the antitrust division, Thomas Barnett, took the rare step of hiring outside counsel to review the Google-Yahoo deal. The hiring of former Hogan & Hartson partner Sanford "Sandy" Litvack was seen by some as a sign that the government was prepared to oppose the agreement. Litvack, a former general counsel for the Walt Disney Company who served as head of the antitrust division during the Carter administration, resigned from Hogan & Hartson in late August.
Yahoo had anticipated that the Google deal would provide it with a new source of funding. Now the struggling Sunnyvale, Calif.-based search portal, which said last month that it would lay off 1,500 employees because of declining sales, will have to look elsewhere.Make a comment