Yahoo, Google Join Advertising Forces

Yahoo has announced a nonexclusive advertising partnership with Google that (for now) puts to rest acquisition discussions it continued having with Microsoft.The deal isn't completely unexpected; Yahoo began testing Google's AdSense advertising program a few months back. Under the initial four-year pact, renewable for another six, Google's ads will appear alongside Yahoo's search results and on some of its Web properties. Yahoo will control the search term queries and pages on which Google's paid search results appear, according to Yahoo. Advertisers will pay Google for its ads that appear on Yahoo searches, and Google will then pay a portion of the revenue to Yahoo, according to Yahoo president Sue Decker.

The deal, which is expected to generate $250 million to $450 million, lets Yahoo pursue other search partners and to deliver its own ads, as well. Of note, the agreement applies to pages that appear only in North America. Yahoo and Google have also agreed to make their instant-messaging services interoperate.PC World, Redmond Channel Partner