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Microsoft Yahoo, Microsoft Corp. appears to have finally locked up rival Yahoo Inc. in a long-awaited Internet search partnership aimed at narrowing Google Inc.’s commanding lead in the most lucrative piece of the online advertising market.
The details of the Microsoft-Yahoo alliance are expected to be announced Wednesday, a person with knowledge of the talks told The Associated Press. This person spoke Tuesday night on condition on anonymity, confirming earlier reports, because the deal was not yet final.
Both Redmond, Wash.-based Microsoft and Sunnyvale, Calif.-based Yahoo declined to comment late Tuesday.
The deal may not be as far-reaching as many investors envisioned. It does not appear to call for Microsoft to pay Yahoo in advance, which could disappoint Wall Street. Yahoo Chief Executive Carol Bartz had said she would join forces with Microsoft only for “boatloads of money.”
Instead, the companies would share revenue generated by search ads on their Web sites. Yahoo would use Microsoft’s search engine, Bing, and it is likely – though not certain – that a “powered by Bing” message will appear on Yahoo’s highly trafficked pages, according to the person who described the talks to the AP.
The companies would also use Microsoft’s advertising technology to deliver appropriate ads alongside search results, while Yahoo will handle the ad sales and customer service.
The person with knowledge of the talks said it is not clear whether the final deal will also cover sales of billboard-style “display” ads, or what will happen to Microsoft’s own ad sales team.
Microsoft, the world’s largest software maker, has been courting Yahoo for several years in hopes of expanding its share of the lucrative online search market.