microsoft-and-yahoo

Microsoft Corp and Yahoo Inc have agreed to an online search and advertising partnership, in an attempt to rival Google Inc, that will be announced within 24 hours, a source familiar with the situation said on Thursday.

Microsoft will not pay an upfront fee to Yahoo, and the focus of the deal is on sharing revenue between the two companies, said the source, who did not want to be identified because a formal announcement has not been made.

The news and details of the expected deal were first reported by the AllThingsDigital blog and Advertising Age. Microsoft and Yahoo declined comment. The two companies have talked for months about cooperating in the online advertising market, dominated by Google.

Microsoft tried to buy Yahoo last year but its $47.5 billion bid was rebuffed and Yahoo’s attempt to seal a search advertising deal with Google Inc fell apart under regulatory scrutiny. Under the expected deal, Microsoft’s new Bing search engine will power Yahoo’s searches, according to Advertising Age, while Yahoo will handle the advertising sales, using Microsoft technology.

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