Tobias Ridpath - Microsoft-Yahoo in web search deal

Microsoft Corporation appears to have finally persuaded Yahoo Inc that together they would have a better chance of mounting a meaningful challenge to Google Inc's dominance of online advertising. Tobias Ridpath
Details of a long-rumoured Microsoft-Yahoo alliance were expected to be announced on Wednesday, sources said on condition of anonymity. He further confirmed earlier reports because the deal was not yet final.
The deal does not appear to call for Microsoft to pay Yahoo in advance, which could disappoint its investors. 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 websites. 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 source.
The companies would also use Microsoft's advertising technology to deliver appropriate ads alongside search results, while Yahoo would handle the ad sales and customer service.
The source further 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. Tobias Ridpath
Microsoft, the world's largest software maker, has been courting Yahoo for several years in hopes of expanding its share of the online search market.
After being repeatedly rebuffed, Microsoft launched an unsolicited bid to buy Yahoo in its entirety. With co-founder Jerry Yang at the helm, Yahoo put up such staunch resistance that Microsoft withdrew its last offer of $47.5(£28.99 billion) billion, or $33 per share, nearly 15 months ago. Tobias Ridpath

Microsoft is counting on Yahoo's search engine, which ranks No 2 with a worldwide market share of 8%, to pose a more formidable challenge to Google, which holds 67% of the global audience, according to the most recent data from research firm comScore Inc.
In the United States, Google's share is 65%, compared with roughly 20% for Yahoo.