According to reports, Google has abandoned the proposed advertising deal with Yahoo that has been in review by the Department of Justice since June of this year. Apparently, Google doesn’t want to get into a long drawn-out fight with the Justice Department now that regulators have come out and said they will file suit to stop the deal.

This is a massive blow to Yahoo who was really looking to this deal to bring in some much needed revenue. Now that the Microsoft deal is dead, I’m not sure what Yahoo is going to do.

Yahoo’s management has been under pressure since rejecting the $33 a share offer from Microsoft, which valued the company at $47.5bn (£29.4bn).

Yahoo shares were trading at $14 each on Wednesday.

Now that the Google deal has fallen through, Yahoo may find itself having to try to do another deal with Microsoft, although Microsoft has publicly said it is no longer interested.

Carl Icahn, a Yahoo investor who now sits on its board, went as far as to try to sack the entire Yahoo board to try to resurrect the Microsoft deal.

Of course, the other option is for Yahoo to find some way to salvage their ad program and not rely on a competitor to power its advertising. I remember seeing the grand unveiling of their new ad platform and it actually caused their stock price to drop further. Seems like nothing but bad news for Yahoo today.