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Yahoo Strikes Deal With Google on Search Ads

Announcement comes just hours after Microsoft deal falls through

By John Johnson,  Newser Staff

Posted Jun 12, 2008 8:10 PM CDT

(Newser) – 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."

Katie Stanton, product manager for Google Finance, attends the opening bell ceremony at the Nasdaq MarketSite on Monday, June 2, 2008 in New York.
Katie Stanton, product manager for Google Finance, attends the opening bell ceremony at the Nasdaq MarketSite on Monday, June 2, 2008 in New York.   (AP Photo/Mark Lennihan)
Yahoo CEO Jerry Yang gestures during the Consumer Electronic Show (CES) keynote in Las Vegas, Jan. 6, 2008.
Yahoo CEO Jerry Yang gestures during the Consumer Electronic Show (CES) keynote in Las Vegas, Jan. 6, 2008.   (AP Photo/Paul Sakuma)
This 2007 file photo shows the exterior of Yahoo! headquarters in Sunnyvale, Calif.
This 2007 file photo shows the exterior of Yahoo! headquarters in Sunnyvale, Calif.   (AP Photo/Paul Sakuma, file)
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