Microsoft and Yahoo! set to agree search deal

LONDON - Yahoo! is on the brink of agreeing a deal to use Microsoft's Bing as its search provider in an deal that would make it a more viable competitor to Google.

Bing... deal would see it become Yahoo!'s default search engine
Bing... deal would see it become Yahoo!'s default search engine

The two companies are expected to announce the details of the agreement later today after months of on-off talks, which are said to have stalled repeatedly over the issue of remuneration. This has been resolved through an agreement to share revenue from search ads.

The deal will make Bing the default search engine on Yahoo! and give it a 30 per cent share of the search market, compared with Google’s estimated 65 per cent share, according to data from ComScore.

Yahoo! will be allowed to sell search ads as well as ads on its own site. It is expected that sales would be handled by a combined centralised operation, comprising staff from both companies.

The deal could run into opposition from US regulators, which blocked a deal between Google and Yahoo! last year that would have created a search joint venture.