Google to place ads next to Yahoo! search results

13th June 2008

Yahoo! is to let Google position ads alongside its search results under a new deal that has emerged after takeover talks with Microsoft reached an official dead end.

Both Microsoft and Yahoo! confirmed that a total acquisition is no longer being discussed, following which shares in Yahoo! fell by ten per cent.

According to one analyst, the Yahoo!-Google deal could signal an end to Microsoft's online advertising hopes.

"Google has made an enormous gain strategically. This move might well have shut Microsoft out of the online space altogether," Jeffrey Lindsay told Reuters.

The news provider notes that Google sees the arrangement as being worth $800 million (£410 million) in revenue.

Meanwhile, Brad Garlinghouse, Yahoo! director of communities and communications, told the BBC recently that the company was in a healthy position.

Social media strategies were to form a key part of Yahoo!'s future plans, Mr Garlinghouse confirmed earlier this week.