Yahoo strike a deal

13/06/2008

In a saga that has rumbled on and been the story of 2008 so far, Yahoo has finally sealed the deal - not with Microsoft, but with search giant Google.

The internet company had been in talks with Microsoft since the turn of the year over a possible merger, but have now opted to sign an advertising partnership deal with Google.

Google chairman Eric Schmidt said the deal would benefit Yahoo and consumers.

"This commercial agreement provides Yahoo with the opportunity to deliver more relevant adverts to users and provide advertisers and publishers with better advertising technology to help them succeed in their own businesses," he said.

Under the agreement, Google will supply some of the advertising on Yahoo's properties, giving Yahoo an estimated share of up to £400 million additional advertising revenue.

Yahoo will continue to sell its own search ads and the ads generating the higher revenue will take priority.

The move comes less than a week after Yahoo ended talks of a takeover from Microsoft, saying that such a deal would damage the market by reducing competition.