Google has called off the partnership deal with Yahoo to escape the likelihood of “protracted legal battle” from government objections and investigators.

The contract, which was announced in June could have lasted 10 years, involved Google agreeing to provide ad technology to Yahoo's search results, and in turn would have given Yahoo $800m (£494m) a year.

After the deal terminated, Yahoo has stated their disappointment of Google's decision not to fight for the deal in court, according to reports.

After upsetting shareholders over their decision to reject Microsoft's takeover offer, Yahoo were hoping the Google-Yahoo deal would appease shareholders.

The end of the deal propelled Yahoo to resurrect their deal with Microsoft, whereby Yahoo Investor Carl Icahn attempted to sack the entire Yahoo board.

Initially the deal was delayed while the Department of Justice considered their partnership by carrying out investigation into trust issues.

Google and Yahoo, the two leading search engines, sparked controversy and concern between the regulators of the US Department of Justice, of their partnership.

Together Google and Yahoo dominated 80% of the search market, and the partnership implied the further increase of online ad rates which caused objections among Microsoft and the Association of National Advertisers.

In the end, Google retreated in their deal after the Justice Department threatened to file a lawsuit to block the deal.

The Justice department has stated: “Had the companies implemented their arrangement, Yahoo's competition likely would have been blunted immediately with respect to the search pages that Yahoo chose to fill with ads sold by Google rather than its own ads.”

SOURCE: BBC, BUSINESS WEEK