• The Wall Street Journal, Tuesday, November 4, 2008 11 AM

Amid mounting pressure from U.S. regulators, Google and Yahoo have revised the terms of their proposed search agreement, which includes shortening the length of the partnership to two years from 10, and capping the total revenue Yahoo can earn from the deal to 25% of what the company earns from search. There was no cap previously. Advertisers would also now be able to opt out of having their ads placed on Yahoo sites.

The revisions, which the Web giants submitted over the weekend, followed reports that the companies' fairly open-ended initial plan would more than likely trigger an antitrust suit from the Department of Justice. Under the partnership, Google and Yahoo, the No. 1 and 2 search companies, would control more than 80% of the search market.

Regulators, meanwhile, have been building a case to block the pact amid concerns from online industry advertisers and associations that the deal would give Google an unfair monopoly in online advertising. It's unknown whether the changes are enough to appease regulators or advertisers concerned about rising keyword prices, the Journal said. Yahoo, whose stock has fallen 45% this year, needs the deal to protect its independence, or at the very least, its search business, from falling into the hands of Microsoft, which is keen to better its position in search.

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