How quickly things change.

In the face of mounting criticism, the two companies have delayed the deal, which would allow Yahoo (YHOO) to run some search and text ads sold by Google (GOOG). And now they are said to be in talks with the Department of Justice about concessions that could prevent the antitrust lawsuit it’s preparing to block the deal. Among them, some throwaway assurances that Yahoo would continue to compete in search ads and a cap on the number of Google ads Yahoo could use.

In a letter to the U.S. Department of Justice, the ANA objected to the Google-Yahoo partnership, arguing that it “will likely diminish competition, increase concentration of market power, limit choices currently available and potentially raise prices to advertisers for high-quality, affordable search advertising.” An understandable concern, considering that Google (GOOG) and Yahoo (YHOO) combined sell more than 80 percent of U.S. search ads, and more than 70 percent of that business is Google’s alone.

But not particularly understandable to Google, which likes to portray the alliance as some sort of enhanced AdSense deal that will make advertising on Yahoo more effective and Yahoo itself a “stronger competitor.” Unfortunately for Google, the ANA doesn’t share that view. Said Robert Liodice, ANA president and CEO, “We believe that the overall impact of this deal is a negative for advertisers and the marketplace.” A harsh indictment and one difficult for Google or the DOJ to shrug off when its coming from a group of companies that spend over $100 billion annually in advertising.

Meanwhile, Yahoo and Google (GOOG) moved to complete a search-ad deal.

Dueling statements from Yahoo and Microsoft on the conclusion of their negotiations below. (Carl Icahn’s outraged letter on the whole matter presumably forthcoming…)

Yahoo Announces Microsoft Talks Have Concluded

Yahoo, a leading global Internet company, today announced that discussions with Microsoft regarding a potential transaction–whether for an acquisition of all of Yahoo or a partial acquisition–have concluded. The conclusion of discussions follows numerous meetings and conversations with Microsoft regarding a number of transaction alternatives, including a meeting between Yahoo and Microsoft on June 8 in which Chairman Roy Bostock and other independent board members from Yahoo participated. At that meeting, Microsoft representatives stated unequivocally that Microsoft is not interested in pursuing an acquisition of all of Yahoo, even at the price range it had previously suggested.

With respect to an acquisition of Yahoo’s search business alone that Microsoft had proposed, Yahoo’s board of directors has determined, after careful evaluation, that such a transaction would not be consistent with the company’s view of the converging search and display marketplaces, would leave the company without an independent search business that it views as critical to its strategic future and would not be in the best interests of Yahoo stockholders.

Yahoo remains focused on maximizing value for stockholders by continuing to execute on its strategy of being the ’starting point’ for the most consumers on the Internet and a ‘must buy’ for advertisers. The online-advertising industry is projected to grow from $40 billion in 2007 to approximately $75 billion in 2010, and the company believes it has the right assets, strategic plan, board of directors and management team to capitalize on this growth opportunity.”

Microsoft Issues Statement Regarding Yahoo

In the weeks since Microsoft withdrew its offer to acquire Yahoo, the two companies have continued to discuss an alternative transaction that Microsoft believes would have delivered in excess of $33 per share to the Yahoo shareholders. This partnership would ensure healthy competition in the marketplace, providing greater choice and innovation for advertisers, publishers and consumers.

As stated on May 3 and reiterated on May 18, Microsoft was not interested in rebidding for all of Yahoo. Our alternative transaction remains available for discussion.”