Worried about the risk of the Justice Department attacking their proposed joint venture as anti-competitive, Yahoo! (NASDAQ:YHOO) and Google (NASDAQ:GOOG) have submitted a revised proposal to cooperate on search ad sales. The alternative partnership is so watered down that it is close to no deal at all.

According to The Wall Street Journal, "under the revision, the companies agreed to cap the revenue Yahoo can generate from the deal to 25% of Yahoo's search revenue and to shorten the length of the agreement to two years from up to 10 years" That will not do Yahoo! much good.

While Google would get ad commissions for selling Yahoo! search inventory, that revenue will not make or break the overall sales of the largest search company in the world. But, Yahoo! gets most of its money from internet display advertising, a business which is no longer growing at the rate that search marketing is. The portal company needs the supplemental income from Google to impress investors with expanding revenue.

The Justice Department looked at Google's 65% or the US search market and Yahoo!'s 20% and indicated that the combination would be likely to raise advertising rates. That may be true. But, with Yahoo!'s revenue out of a partnership capped at a low level, investors are going see the new proposal as window dressing.

That mean Yahoo!'s shares will likely drop further.

Douglas A. McIntyre is an editor at 24/7 Wall St.