The Week: City news - Google to sign Yahoo! deal

Google and Yahoo! are close to signing a deal to combine their search advertising systems, in a move designed to sound the death knell for any takeover of Yahoo! by Microsoft.

The agreement will enable Yahoo! to run ads supplied by Google alongside its own search results and on some of its websites in the US and Canada. Microsoft dropped its $44.6 billion (£22.6 billion) bid last month, but the Yahoo! chief executive, Jerry Yang, has since come under increasing pressure from investors, led by Carl Icahn, to agree to do a deal.