The Wall Street Journal had reported that Yahoo and Google are going to work together on an experiment that might lead to big things. In other words, a two-week test that is limited to Yahoo’s U.S. traffic will carry Google ads. These ads will be limited to “no more than 3% of Yahoo’s Web search queries.” If all goes well, then a broader search outsourcing arrangement could be struck by the two companies.

This completely makes Microsoft CEO, Steve “crazy” Balmer, had to shut his mouth. But I might think that sleep with your enemy, couldn’t solve the problem. It’s not a wise turn though to partner already “problem” AOL and Google. In otherwise, it means that Yahoo had enough for it’s own search market. Sure it will give it to Google anyway and that’s why Brad Smith, Microsoft’s General Counsel, told the WSJ:

“Any definitive agreement between Yahoo! and Google would consolidate over 90% of the search advertising market in Google’s hands. This would make the market far less competitive, in sharp contrast to our own proposal to acquire Yahoo!”

Either way, Google is the clear winner for this deal, otherwise Yahoo accept Microsoft offer or get partner with Google and AOL in business.Yahoo and Time Warner are planning on putting together a deal where Yahoo will get AOL which is being valued at $10 billion. In exchange Time Warner will get 20% of the combined company (Yahoo) and will make a cash investment. Google will be the search-ad-partner. Yahoo would spend the money it gets from Time Warner $10 billion buying back its own stock and beating down Microsoft. Yahoo had compound their problems anyway.

Share/Save/Bookmark title=