Google announced Wednesday that regulatory scrutiny has caused the company to jettison plans to strike an advertising deal with Yahoo, PC Magazine reports.

"Pressing ahead risked not only a protracted legal battle but also damage to relationships with valued partners," David Drummond, Google's chief legal officer, wrote in a blog post. "That wouldn't have been in the long term interests of Google or our users, so we have decided to end the agreement."

This arrangement scuttles Yahoo's big Plan B after rejecting the Microsoft merger. Do they have a Plan C?