As you have probably heard by now, all communication between Yahoo and Microsoft has been broken off. Just a couple of months ago it appeared that the two companies would work out a deal in which Microsoft was to purchase Yahoo for tens of billions of dollars. But although Yahoo did not strike a deal with Microsoft, they are still in the news. This time around, it appears that the company is going to strike up a partnership with search engine giant, Google.

On the surface, the terms of the partnership are simple: Yahoo will now have the ability to display Google ads with some of their search results. This covers results on both Yahoo search as well as publisher networks in Canada and the United States.

At this time, it is believed that Yahoo will have full control over which pages the Google ads will appear. To go along with this, it is not known how the company will decide which pages to use and which ones to leave out. Sue Decker, Yahoo President said, “We wanted to make sure we’d have control in the advertiser segments we’re comparable with or superior in performance.”

The big question is: is Yahoo going to be able to make additional profits through this partnership? With their current business model struggling, Yahoo has not been able to make up any ground on Google. Luckily for them, it is thought that they will be able to generate up to $450 million in cash flow through this deal. Obviously, this is good for the company as they will hopefully be able to steady a ship that has been rocked when the Microsoft deal fell through.

Although many tech savvy web users are confused by this partnership, it is safe to say that things will clear up over the months to come. In the meantime, it will be interesting to see if there are any other developments between the two biggest players in the search engine industry.

Filed under: Google, News, Web 2.0