Microsoft-Yahoo Deal

Yahoo, Microsoft reach search and ad partnership
Internet search firm Yahoo and software giant Microsoft have reached a 10-year deal in which they hope to tackle the online dominance of Google, media reports said Wednesday.

Under the terms of the deal, Yahoo will use Microsoft's new search engine on its sites and handle some advertising sales for Microsoft. The two companies will share search-related advertising revenue.

"This agreement comes with boatloads of value for Yahoo, our users, and the industry, and I believe it establishes the foundation for a new era of Internet innovation and development," Yahoo Chief Executive Officer Carol Bartz was quoted as saying by the Wall Street Journal.

Google controls some 65 percent of the US Internet search market, with Yahoo ranked a distant second with 19.6 percent and Microsoft third with 8.4 percent.

Microsoft almost bought Yahoo for $47.5 billion last year, but the move was scuttled at the last minute by Yahoo co-founder and chief executive Jerry Yang, who later resigned following widespread criticism.

Microsoft has since refused to revive the buyout offer, but Yang's successor, Bartz, confirmed in May that the two companies were holding talks on search collaboration.

The agreement would come just weeks after Microsoft launched its new search engine, Bing, which has been widely praised as a worthy competitor to Google.