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Re: guitarmusic post# 5951

Wednesday, 04/09/2008 3:34:16 PM

Wednesday, April 09, 2008 3:34:16 PM

Yahoo in Talks With Google To Handle Some Search Ads

Yahoo Inc. is close to announcing that it plans to carry search advertising from Google Inc. as part of a test that could lead to a broader partnership, according to people familiar with the matter.

The short-term test, involving a very limited percentage of Yahoo's Web search queries, is designed for the two sides to evaluate the revenue potential of a broader search ad outsourcing arrangement. They have been discussing such an arrangement as part of Yahoo's pursuit of alternatives to Microsoft Corp.'s unsolicited acquisition offer, according to people familiar with the matter.

The test under discussion, given its short time frame and limited scope, shouldn't stand in the way of any eventual sale of Yahoo to Microsoft, says the person familiar with the matter. But it could factor into the dynamics of the ongoing deal standoff, as a way for Yahoo to signal to investors its alternatives to the Microsoft deal and potentially as an irritant for Microsoft, which views Google as a major rival.

Analysts have predicted outsourcing its search ads to Google would boost Yahoo's cash flow, since Google's system generates significantly more revenue for each search query than Yahoo does. Under such an arrangement, Yahoo would likely garner a majority of the revenue and Google keep the rest as a commission.

http://online.wsj.com/article/SB120776803032602423.html?mod=yahoo_hs&ru=yahoo

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