Yahoo to test ad outsourcing with Google

Showing it has alternatives to Microsoft’s hostile merger bid, Yahoo (YHOO) is talking to Google (GOOG) about a joint search-advertising trial, according to a report posted on The Wall Street Journal’s site.

The discussions with Microsoft’s biggest rival come less than a week after Yahoo was given a 3-week deadline by Microsoft to come to the table and negotiate.

The tests are to be limited and not nessarily a deal killer for the Microsoft/Yahoo takeover, but it could lead to a larger partnership between the two search engine giants, the Journal reports.

One of the issues the outsourcing of search ads to Google would address is the heavy costs Yahoo faces in hosting and powering its own server facilities and infrustructure.

Yahoo, along with large shareholder Legg Mason, are attempting to show that the company can thrive independently if necessary.

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Hooking up with the very company that blew your doors off is not what I would call “thriving”. Maybe surviving.

Posted By Dave, Akron, Ohio : April 10, 2008 8:43 am

Instead of merging with another competitor, Yahoo should prove that it can thrive on its own. As a consumer, we would want to see that. Merger with Google would make a better sense if things can be worked out.

Posted By Madhu Aryal, Investment Banker, Manhattan, New York : April 9, 2008 4:44 pm

Boy oh boy this is gonna make one powerful Google! Microsoft looks pretty small now compared to a Google/Yahoo company.

Posted By Bill Samson Dixie, GA : April 9, 2008 4:22 pm

the kind of last ditch stupidity that kills reasonable companies. so – initially yahoo “outsourced” search to google – look where that has gotten them; no ads – where is the competitive advantage – if every core competency you have is outsources??

Posted By h, chi, il : April 9, 2008 4:03 pm

It just goes to show you Yahoo needs to merge with Microsoft to have any chance of competing with Google on search ads.

Posted By Abeselom, Land O Lakes, FL : April 9, 2008 3:59 pm

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