Google has announced that it is abandoning a deal with Yahoo over search advertising as it became clear that US regulators would attempt to block any tie-up.
Google stated that it does not wish to become embroiled in a 'protracted legal battle' over the deal, which the Justice Department objects to.
"…it's clear that government regulators and some advertisers continue to have concerns about the agreement, Google David Drummond, Senior Vice President, Corporate Development and Chief Legal Officer wrote on the company's official 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 have decided to end the agreement.
"We're of course disappointed that this deal won't be moving ahead. But we're not going to let the prospect of a lengthy legal battle distract us from our core mission.
"That would be like trying to drive down the road of innovation with the parking brake on. Google's continued success depends on staying focused on what we do best: creating useful products for our users and partners."
Yahoo, a company that is in dire straits following a decision to resist a takeover bid from Microsoft and is suffering in the current financial climate, is disappointed that Google would not fight the battle through the courts.