After several days of rumors that the proposed advertising partnership between Google and Yahoo was on the verge of unraveling, Google's legal team announced today that the deal is officially dead.

The Washington Post's Kim Hart and Peter Whoriskey report:

Google's withdrawal presents a setback for Yahoo, which has struggled to compete with Google's online search business and saw the partnership as a way to boost its revenue after rejecting Microsoft's takeover bid this year.

After four months of review, including discussions of various possible changes to the agreement, it's clear that government regulators and some advertisers continue to have concerns about the agreement," said David Drummond, Google's chief legal officer.

Google faced an antitrust challenge from the U.S. Justice Department and fierce opposition from Microsoft, which trails Google and Yahoo in the search engine market. Some advertisers and consumer advocates protested the deal, contending it would give Google control over a majority of online search advertising, leading to higher prices for advertisers, The Post reports.

The Justice Department acknowledged today it had informed both companies that they would face an antitrust lawsuit if the deal proceeded.

"The arrangement likely would have denied consumers the benefits of competition -- lower prices, better service and greater innovation," said Thomas O. Barnett, assistant attorney general overseeing the department's antitrust division.

Both companies expressed disappointment at the deal's collapse, but Google vice president David Drummond said the legal risk wasn't worth it: "Pressing ahead risked not only a protracted legal battle but also damage to relationships with valued partners."