April 17, 2008 -- (WEB HOST INDUSTRY REVIEW) -- After successful week of testing out Google's ad engine, Yahoo (yahoo.com) says it is contemplating a more extensive partnership with its search engine rival, according to reports in The Wall Street Journal (online.wsj.com).
Citing "people familiar with the matter," The Wall Street Journal reports that Yahoo! has "moved closer to outsourcing its search advertising to Google."
The Journal's sources say that both companies are pleased with Yahoo's test of Google's AdSense for Search service, launched last week, which displayed Google-brokered ads alongside Yahoo search results.
The two opposing search engines collaborating is just another effort by Yahoo to defend itself from Microsoft's ongoing takeover bid. Microsoft made a $44.6 billion bid in February for Yahoo, and is now threatening a proxy fight if Yahoo CEO Jerry Yang and company does not give in.
Last week's Yahoo announcement regarding its Google ad test prompted Microsoft to say that any "definitive agreement" between those two companies "would make the market far less competitive." If a further partnership is made, the two companies would likely face a similar backlash from regulators.
But according to The Journal's sources, Yahoo and Google are brainstorming ways to satisfy regulators, which could include limiting their partnership to particular search queries or geographical areas.
