Google (GOOG) walked away from its partnership with Yahoo (YHOO) after the US Justice Department announced it would sue to block the agreement.

Yahoo's chances for a turnaround look longer without Google's muscle behind its online search ads.

This could rekindle talks between Yahoo and Microsoft (MSFT) or Yahoo and Time Warner (TWX).

Yahoo's stock has dropped about 40% this year. Carl Icahn, a Yahoo board member, has urged Yahoo to sell its search business to Microsoft.

The chances of Microsoft acquiring Yahoo outright appear to be fading. If Microsoft acquires Yahoo's search business, it's likely to wait to see how the souring economy hits both companies. Yahoo is struggling, and may have to act quickly. Still, a fire sale is unlikely, but Yahoo may not be able to get the best price.

In June, Yahoo agreed to let Google, the number-one search company, sell some of the ads shown next to Yahoo's search results. The deal looked like a stopgap measure to give Yahoo some breathing room after it rejected Microsoft's $47.5 billion takeover bid less than a month before.

Google said it ended the deal to avoid a "protracted legal battle." Google has become the heavy hitter in online advertising without regulatory interference. The Yahoo deal caught the attention of federal regulators, and Google's future deals may come under greater scrutiny.

In what's looking increasingly like a long shot, Yahoo might acquire at least a portion of Time Warner's AOL. But it's hard to see the benefit of combining parts of 2 companies that lag behind the competition. AOL operates Platform-A which allows advertisers to display ads across AOL's own sites and creates an opportunity for Yahoo.

Speaking Wednesday in San Francisco, Yahoo founder and CEO Jerry Yang said, "To this day, I believe the best ting or Microsoft to do is to buy Yahoo."

Hmmm, then why didn't Yang sell when he had the chance earlier this year?