Yahoo To Test Google Ads Next To Search Results

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The plan would encompass up to three percent of readers' search queries, in an effort to demonstrate that the company remains relevant without the support of Microsoft, which offered a $44.6 billion cash-and-stock bid to acquire Yahoo in February.

"The test will apply only to traffic from in the U.S. and will not include Yahoo's extended network of affiliate or premium publisher partners," the statement read. "The testing does not necessarily mean that Yahoo will join the AdSense for Search program or that any further commercial relationship with Google will result."

Soon after the offer was announced, David Drummond, Google's chief legal officer, voiced his concerns about the offer in a blog post comparing Microsoft's tactics to monopoly practices.

"Could Microsoft now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC?" he asked. "While the Internet rewards competitive innovation, Microsoft has frequently sought to establish proprietary monopolies --and then leverage its dominance into new, adjacent markets."

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In the interim period between Microsoft's bid offer and Yahoo's AdSense test run announcement, jockeying between Yahoo and Microsoft has persisted, with Yahoo recently claiming Microsoft's bid "substantially undervalues" the company's worth.

That statement came in response to an ultimatum issued on Saturday by Microsoft, requiring Yahoo to come to the table for talks and negotiate a deal within three weeks. On receiving news of Yahoo's AdSense test run, Microsoft general counsel Brad Smith issued a statement highlighting antitrust concerns.

"Any definitive agreement between Yahoo and Google would consolidate over 90 percent of the search advertising market in Google's hands. This would make the market far less competitive, in sharp contrast to our own proposal to acquire Yahoo," he wrote. "Our proposal remains the only alternative put forward that offers Yahoo shareholders full and fair value for their shares, gives every shareholder a vote on the future of the company, and enhances choice for content creators, advertisers, and consumers."

Yahoo's test run of AdSense will also be watched from Washington, DC. Wisconsin Democratic Senator Herb Kohl, chairman of the Senate's Subcommittee on Antitrust, Competition Policy and Consumer Rights, said in a statement he will be "following closely" the test agreement. "Should there be moves to make this agreement permanent, we will examine it closely in the Antitrust Subcommittee to ensure that it does not harm competition," he said.

Yahoo's bid to stay independent has also involved discussions with Time Warner's AOL and News Corp., which The New York Times reports is in talks with Microsoft over a potential joint partnership in acquiring Yahoo.