Google and Yahoo! No More?

The Google/Yahoo! ad alliance was met with skepticism by some in the marketing community. Many thought a monopolistic advertising system for display and pay per click ads could be coming to the fore. Others were excited at the possibility the alliance could create.

Alas, the alliance is null and void. Amid rampant distrust and strained relations Google has released an announcement that the ad deal has be dissolved. Yahoo! still faces challenges to their profitability and very existence, while Google will forge ahead virtually unscathed. Rather than face a litigous backlash, they decided it was best to continue alone.

Yahoo!, a battered internet giant that is facing negativity from investors that hoped for a sale to Microsoft a few months ago, will certainly face major liquidity challenges to fund their initiatives. The inability to display ads from Google on their search pages will further place a strain on a business that has fallen from 23% to 19% in the last year.

An uncertain future awaits Yahoo! due to its inability to wrest search business away from rival juggernaut Google. Yahoo! isn't in the worst of trouble though. Their 141 million online investors is second only to Google's 144 million, and their assets of $15 billion could be enough to solicit a healthy purchase from a larger company. Microsoft could come back in the picture, or Time Warner's AOL could make a play for the company. Whatever happens, the future of search is sure to morph into a new medium we don't know today.