Microsoft, Yahoo Expected To Sign Online Search, Advertising Deal

Microsoft and Yahoo have finally agreed on their long-expected online search and advertising relationship, the AllThingsDigital blog reported Tuesday.

The agreement is expected to be officially unveiled within the next 24 hours, capping a long dance between the two erstwhile partners, the blog reported, citing unnamed sources.

The relationship between Microsoft and Yahoo is widely expected to provide a counterweight to Google's dominance in the online search and advertising business.

AllThingsDigital said that while it is not clear whether the final agreement has actually been signed, signing the papers is more of a formality as negotiations are essentially complete.

Under the terms of the agreement, Microsoft would not pay any upfront money to Yahoo. Instead, according to AllThings Digital, the two would engage in a revenue-sharing relationship.

Microsoft's search technology will be used on Yahoo's sites, but it is unclear if it will be branded with Microsoft's "Bing" moniker, AllThingsDigital wrote. However, Yahoo would sell search adds on its sites and on Bing, with Microsoft's AdCenter sales technology underneath it.

The agreement is not as strong as the one originally envisioned by the industry back when Microsoft first launched a hostile takeover bid for Yahoo. Since then, the two companies have been talking on and off about the possibility of working together against Google, which has turned out to be their common enemy.

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