Yahoo struck a deal today with Google to display its rival's search ads, just hours after announcing the end of talks with Microsoft on a possible merger, the Wall Street Journal reports. The deal with Google, which still faces months of federal scrutiny, could bring in $800 million a year for Yahoo and have a profound effect on Internet advertising.
Under the deal, Yahoo would run ads supplied by Google next to its own search results. Yahoo would control how they are displayed and which search terms it would offer Google. "They're using this as a tool to boost short-term cash flow," one analyst told CNET. "They're trying to keep the wolves at bay."