The US Department of Justice has received details of a new version of the proposed advertising search deal between Google and Yahoo, according to reports in The Wall Street Journal.

Under Google's AdSense for Search programme, which the two firms arranged earlier this year, Yahoo will display search ads sold by Google and take a share of the revenue.

But the plan met with criticism, particularly from Microsoft which suggested that the deal would give Google an increased monopoly in the online advertising market.

Reports now claim that the advertising deal will be for two years, rather than 10, and that the money Yahoo generates from the arrangement will be capped at 25 per cent of its revenue.

The stricter deal terms should increase the probability of the Justice Department's sanctioning the agreement.

Yahoo has always maintained that its intention was to strengthen shareholder value. The initial agreement with Google was formed just as Microsoft's proposed acquisition of Yahoo fell through.

In separate news, Yahoo announced today that it is to close Yahoo Live, which is run by the firm's Brickhouse division.

"It is with great sadness that I share the news that Yahoo Live, a Brickhouse project in social broadcasting, will be going off the air on 3 December 2008," said Yahoo developer Keith Thornhill in a Yahoo Live Blog posting.

"Our mission on the Brickhouse team is to quickly develop product ideas that can add value to Yahoo as a whole. To do this effectively we constantly evaluate our early-stage products and sometimes have to make the hard decision to move on in order to continue exploring new territory and developing new products."

A separate blog posting shows that Yahoo intends to focus its efforts on a location monitoring application known as Fire Eagle.

Yahoo has a new Fire Eagle App Gallery, which will allow users to explore applications that work with Twitter, Nokia devices and Apple's iPhone.

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Yahoo puts up For Sale sign 8:25AM, Thursday 6th November 2008

Yahoo chief executive Jerry Yang claims the company is open to a Microsoft offer, just hours after its Google ads deal fell through.

Speaking at the Web 2.0 Summit hours after archrival Google ditched its search advertising partnership with Yahoo, Yang said he remains open to selling the internet company to Microsoft, but at the right price.

"To this day, I have to say that the best thing for Microsoft to do is to buy Yahoo. I don't think that is a bad idea at all...at the right price, whatever the price is, we are willing to sell the company," he said.

"We were ready to negotiate, we wanted to negotiate a deal, and we felt that we weren't that far apart. But at the end of the day, they withdrew and they since have been very clear about not wanting to buy the company."

Microsoft had offered to buy Yahoo's search business after withdrawing an offer for the whole company in May.

Yahoo shares surged on Wednesday after a rumor posted on a blog said Yahoo and Microsoft were in advanced talks to sell the


company for between $17 and $19 a share. The blog also reported that Yang would step down from his CEO position.

Yahoo officials later said the report was untrue.

Yahoo's stock price is currently trading far below the $31-a-share Microsoft originally offered, and the company has come under severe criticism from investors for turning down the software giant's offer.

Yang also declined to comment on Yahoo's discussions with Time Warner about buying its AOL division, which sources say are ongoing.

Instead, the Yahoo co-founder spelled out his vision for the company, which includes becoming a one-stop consumer brand that lets people access what they want on the internet.

Yang also said he was disappointed at Google's decision to walk away from the search pact>. The two companies signed the deal in June when Yahoo was looking for ways to build an independent growth strategy.

The search deal was expected to add $800 million in annual revenue for Yahoo.

But Google, concerned that the US Department of Justice would block the agreement on antitrust grounds, decided to withdraw from the partnership.

Responding to a question about whether he had any regrets about stepping into the CEO role last year, Yang said: "I don't regret a moment of what happened even though it's not been the most fun thing."

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