Google/Yahoo deal not dead yet

Looks like reports that Google may just walk away from its upcoming ad-sharing deal with Yahoo

, leaving the nascent partnership dead in the water, were a bit premature. The New York Times reports that the two search companies have revised their upcoming agreement in a last-ditch effort to appease the U.S. Department of Justice and other regulators. The changes make the deal a bit less attractive to both parties, but they may just be enough to keep regulators from scrutinizing the deal–and Google’s monopolistic tendencies–any further.

According to the Times, Yahoo and Google now say the deal will only last two years, vs. the original 10 or more, and have offered to cap the amount that Yahoo can earn from it at 25% of its search advertising revenue. The two submitted the new proposal to the DOJ over the weekend.

The new terms significantly curtail the deal’s financial advantages to both firms. But capping the revenues at 25% of Yahoo’s search advertising income is a safe way to ensure Yahoo doesn’t turn over all of its search engine advertising to Google, alleviating fears that the deal would only further enhance Google’s monopoly in the industry. And while Google also stands to make less from the deal, it may be worth it if it rids the search giant of any further regulatory scrutiny.

All parties to the deal say that the discussions are ongoing, and an eventual resolution is expected this week. So the deal isn’t dead yet, but it does seem to be on life support.