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A proposed partnership between Google and Yahoo for the sale and distribution of online advertisements has been a hot topic in tech circles this year, drawing scrutiny from privacy groups, European regulators and the Justice Department. Now reports are circulating that the long-delayed deal might fall apart.

In an article in the online version of the Wall Street Journal, reporter Jessica Vascellaro says that according to "people familiar with the matter," the companies might walk away from the deal as early as next week.

"The two companies met Thursday with the Justice Department, part of a series of meetings to address the concerns of regulators," Vascellaro reported. "While the parties may agree to continue the talks -- or they could reach a resolution -- there are signs they are unwilling to make compromises to address the Justice Department's objections."

Representatives of both companies said that discussions with the Justice Department are ongoing, but otherwise declined to discuss the specifics of any negotiations. Yahoo spokesperson Tracy Schmaler said that Yahoo is still hoping to resolve matters.

"We have been working with the Department of Justice regarding our agreement with Google, and those discussions are ongoing," Schmaler said. "As we have said, we believe strongly that this agreement will strengthen Yahoo's competitive position in online advertising and will help to drive a more robust, higher-quality Yahoo marketplace for our advertisers, publishers and users."

Sticking Points

Without more elaboration from the principals, it is difficult to know exactly what is holding up the Justice Department's verdict on the antitrust implications of the proposed ad deal. The companies agreed to give the Justice Department four months to evaluate the proposal, but the deadline came and went earlier this month without any word from Washington.

Vascellaro suggested that one sticking point is a DOJ proposal to have the parties sign a consent...

Google has rarely included scanned documents in its search results because it had no way to determine the nature of the content, but that's about to change. The search engine giant says it will use optical character recognition (OCR) software to make it possible for Web surfers to search any Web-hosted document stored in the PDF file format developed by Adobe Systems.

Google is using the technology to convert scanned documents into equivalent text files that can be searched, indexed and returned as responses to Google search queries, noted Evin Levey, a Google product manager.

"This is a small but important step forward in our mission of making all the world's information accessible and useful," Levey said.

A Boon for Books

The company's brute-force application of OCR technology to the Web is also expected to aid Google Book Search -- the ambitious and controversial book-scanning project that the search engine giant first unveiled at the 2004 Frankfurt Book Fair. Ever since, Google has been scanning the book collections at the world's major libraries at a rate of 3,000 book titles per day.

Though the project initially raised copyright concerns, Google has just concluded an agreement with the Authors Guild and the Association of American Publishers under which Google will be able to expand online access to millions of in-copyright books and other written materials in the United States. The agreement resolves lawsuits that had challenged Google's plan to digitize, search and show snippets of in-copyright books and to share digital copies with libraries without the explicit permission of the copyright owner.

Google's Chief Legal Officer David Drummond says the agreement is truly groundbreaking because it will give readers online access to millions of in-copyright books for the very first time.

"Second, it will create a new market for authors and publishers to sell...

IBM is not letting go without a fight. The computer maker has filed a lawsuit against one of its former top-level executives who left the company to work at Apple.

Mark Papermaster, a server expert and vice president of IBM's blade development unit, is slated to start at Apple in just a few weeks but his knowledge of IBM trade secrets may stop him from joining the maker of Macs.

IBM, which spends billions on research each year, is basing its lawsuit filed in US District Court in Manhattan on Oct. 22 on a non-competition agreement Papermaster signed in 2006 which states he would not work for any competitor up to one year after his employment ended with IBM. The complaint also cites IBM trade secrets as another reason for stopping the move to work alongside with Apple's chief executive, Steve Jobs.

The no-compete document, in which Papermaster signed, says the executive acknowledges that IBM engages in an intensely competitive environment and will not associate with or engage in any business enterprise for one year work for any competitor and for two years not lure any other IBM employee to a competitor.

"Mr. Papermaster's employment by Apple is a violation of his agreement with IBM against working for a competitor should he leave IBM," said IBM in a statement to CNET, who broke the story. "We will vigorously pursue this case in court."

The 26-year veteran is also a member of the company's Integration and Values Team, a group of more than 300 senior managers. The IVT group is responsible for IBM's most significant and challenging issues, according to court documents. If those issues are shared with competitors, IBM will lose its upper hand.

Head-to-Head

IBM's work in microprocessors and servers maybe the crux behind the lawsuit. IBM states in court documents that Papermaster's years working...