Yahoo and Google have revised their search-advertising agreement with caps, according to a report in The Wall Street Journal.
According to the report, the companies sent a revised proposal to the US Department of Justice over the weekend that calls for such significant changes as limiting the 10-year agreement to two years and, more importantly, placing a cap of 25 percent on the amount of revenue Yahoo can generate from Google under the deal.
The search-advertising deal calls for Yahoo to place Google's ads on its own relevant search pages. Under the initial deal, Yahoo had hoped to receive $800m (£511m) within the first year of the agreement.
Whether the new proposal will be accepted by Department of Justice officials has yet to be seen, given that antitrust regulators have sought a cap closer to the 20 percent range, one source familiar with the discussions told ZDNet UK sister site CNET News.com.
Regulators have been concerned that a Yahoo-Google agreement would lead to higher advertising prices and Yahoo exiting the search-advertising business altogether if it found the Google deal lucrative enough.
As a result, regulators believe the cap on the percentage of Google ads that could appear on Yahoo search pages would serve as a means to keep the internet search pioneer in the game.
The companies had been balking at such low caps, noting it would offer little economic benefit to their arrangement, sources familiar with the deal previously told CNET News.com.
It remains to be seen whether the revised deal will go through and whether Yahoo's cut would be reduced to $200m, rather than $800m.
Representatives for both companies declined to comment on their discussions with regulators, other than to note that the process is continuing.
"We are continuing to have co-operative discussions with the Department of Justice about this arrangement and agreed to a brief delay in implementing the agreement while those discussions continue. We are confident that the arrangement is beneficial to competition, but we are not going to discuss the details of the process," Adam Kovacevich, a Google spokesman, said in a statement.
Should an agreement be reached, the Department of Justice would probably file a consent decree with the courts, which would carry the same force as a court order. Typically, consent decrees last 10 years, or as little as five years, so a two-year consent decree would be short, a source told CNET News.com.
In these types of arrangements, the Department of Justice would typically insist that a monitor be put in place to ensure the structure of the consent decree was upheld. The monitor would report to the Department of Justice but their salary would be paid by the companies, the source added.
