Google abandons the advertising partnership with Yahoo because of some regulatory objections which caused the Yahoo shares to rise as the investors are hoping the move might lead to a resumption of deal talks with Microsoft.

The discussion which Yahoo denied the rumours that it will sell their shares to Microsoft for about US$17 (S$25.43) and US$19 a share and the shares are 8 per cent higher.

The Google had planned to file a lawsuit to block the deal.

Yahoo regrets Google’s decision, and said it was ‘disappointed that Google has elected to withdraw from the agreement rather than defend it in court’. According to comScore , Google and Yahoo had more than 80 per cent of the web search market.

The Number 1 and 2 company among the internet search market, Google and Yahoo announced their Partnership in June. Needham & Co analyst Mark May said Yahoo remaining independent was the ‘worst possible scenario’ for the company.