Contentinople - Erin Barker - News Bits: Terror in Silicon Valley

Written by Erin Barker

Friday, October 31. 2008 at 11:35 AM EDT Post a comment

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The digital media industry is getting frightening, perhaps downright spooky, this Halloween. EA Games and 60frames are the latest companies to announce layoffs... And now, even the Google (Nasdaq: GOOG)/Yahoo Inc. (Nasdaq: YHOO) search ads partnership could be on the rocks.

After all this time, the two companies are considering going their separate ways, The Wall Street Journal reports. Talks with the Justice Department are stalling, particularly over the department's suggestion that companies sign "a consent decree stating the terms of the partnership," which would mean dealing with a judge's ongoing oversight.

Google especially seems tempted to walk, WSJ reports. Yahoo, after all, needs the deal more -- if it falls through it'll have to go running back to old flame Microsoft Corp. (Nasdaq: MSFT), without much leverage.

In other news:

Electronic Arts Inc. (Nasdaq: ERTS) is laying off about 540 people, or 6 percent of its workforce, showing that though the video game industry is expected to grow by as much as 20 percent this year, it still isn't "recession-proof." CEO John Riccitiello doesn't necessarily blame the economy, but he does blame less retail foot traffic... and Harry Potter. The company was forced to delay the release of its Harry Potter and the Half-Blood Prince game until next year to coincide with the corresponding movie release's rescheduling.

60frames, the digital studio that produced 30 Web series, including this extremely NSFW Kids in the Hall sketch last April, has laid off six employees, leaving only eight remaining. According to The Hollywood Reporter, the layoffs will not affect the studio's recently announced deal with NBCU to produce original series.

Tags: Advertising, Business, Google, NBC, Partnerships, Search, Yahoo

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