Google announced Wednesday that it is ending its effort towards a search advertising partnership with Yahoo.

After four months of struggling with advertisers and government regulators who voiced competitive and antitrust concerns about the deal, the company said in a blog post that continuing the effort is not in the best interests of Google or its users. The proposed deal would have seen Yahoo running Google advertisements in its search results.

Now that the Google-Yahoo deal is finished–before it even started–Jerry Yang & Co. will take a revenue hit. According to Piper Jaffray analyst Gene Munster, Yahoo would have reaped revenue of about $665 million under the revised Google ad deal with operating cash flow of $200 million to $350 million.

There was a rumor that Yang would step down and Microsoft would buy Yahoo. The company has denied the rumor, which was reported by VentureBeat.

I am still betting on Microsoft to buy out Yahoo for a much lower price than initially offered. Yahoo needs to do something fast or it will be left struggling to compete with Google.