Fears of a lengthy legal battle killed the controversial Google-Yahoo ad deal Wednesday, announced Google Senior VP David Drummond.

“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,” wrote Drummond on the company’s Public Policy Blog. “Pressing ahead risked not only a protracted legal battle but also damage to relationships with valued partners. That wouldn't have been in the long term interests of Google or our users, so we have decided to end the agreement.”

The deal would have allowed Yahoo’s advertising network to use ad content sourced from Google’s competing AdSense network, and generally speaking, was met with a warm reception on its announcement. A number of Google’s competitors objected, however, citing concerns that such a program would give the internet giant a whopping 80 percent of the search ad market – a position clearly prone to abuse.

In an effort to work with regulators, Google previously announced that it would delay the agreement in order to iron out regulatory concerns with the Department of Justice. A number of other concessions, which would have shortened the length of the agreement and capped Yahoo’s potential revenues, were not sufficiently appeasing.

News broke out last September that DoJ investigators hired top antitrust lawyer Sandy Litvack, who worked previously under President Jimmy Carter and was the vice-chairman of Walt Disney Co. Litvack was tasked with putting together a case against the Google-Yahoo deal, should it be needed. Some of the DoJ’s antitrust concerns come from Microsoft, which runs a competing advertising network called adCenter.

Wired reports that Yahoo “expressed disappointment” over a decision it says Google reached “unilaterally.”

“Yahoo! continues to believe in the benefits of the agreement and is disappointed that Google has elected to withdraw from the agreement rather than defend it in court,” said the company in a statement.

The ad deal could have pumped an additional, much-needed $800 million of revenue into ailing Yahoo, which recently cut 1,500 employees after enduring a 51% drop in income.

 “We feel that the agreement would have been good for publishers, advertisers, and users - as well, of course, for Yahoo! and Google,” said Drummond. “But we're not going to let the prospect of a lengthy legal battle distract us from our core mission.”