In a dramatic but not entirely unexpected development, Yahoo has announced its tie-up with former rival Google to display the giants ads alongwith that of its own search results. This is indeed a desperate attempt by yahoo management to thwart a somewhat hostile bid by software major Microsoft and also arrest its sagging fortune.

In a statement Yahoo said that it will initially display Google ads only in Yahoo USA and Canada. The management expects to rake in an additional of $800 million revenue in the first one year and thereon an additional $250 million as incremental operating cash flow.

Yahoo CEO and co-founder Mr. Jerry Yang says -

“We believe that the convergence of search and display is the next major development in the evolution of rapidly changing online advertising industry. Our strategies are specifically designed to capitalize on this convergence - and this agreement helps us move them forward in a significant way”.

According to Mr. Sue Decker, Yahoo President, the agreement

“provides a source of funds to both deliver financial value to stockholders from search monetization and to invest in our broader strategy to transform display advertising and start our starting point objectives”.

The deal with Google is expected since its failure to agree on terms with Microsoft on 8th June . But both internet giants agreed to delay the implementation of the agreement till 3 and 1/2 months for the US department of Justice to review the arrangements.

Posted on June 17th, 2008 by John
Filed under: Search Engine News