Now Google and Yahoo Announce Partnership

Hot on the heals of Microsoft’s hostile bid to buy Yahoo and Yahoo saying their offer is too low, there comes the most extraordinary announcement.

Yahoo is to start testing Google’s advertising system Awords and put the results in the Yahoo search results.

The Internet company said it would begin a limited test of Google’s search advertising technology as part of efforts to remain independent from Microsoft. The test is designed to show whether or not the company could extract more revenue if it outsourced its search advertising system to Google, a person briefed on the plan said.

The test will involve using Google’s search advertising system, called AdSense for Search, to deliver ads that appear alongside Yahoo’s search results. The test will involve searches conducted in the United States on Yahoo.com, not on any of the company’s search affiliates, and will be limited to no more than 3 percent of all search queries, Yahoo said in a press release.

Whatever next? Google to purchase Yahoo themselves?