Microsoft Corp. 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.
Details of a long-rumored Microsoft-Yahoo alliance were expected to be announced on July 29, a person with knowledge of the talks told The Associated Press. This person spoke Tuesday night on condition of anonymity, confirming 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 person who described the talks to the AP.
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 person with knowledge of the talks 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.
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.
