Microsoft and Yahoo Agree Search Deal

Microsoft Corp. has finally roped Yahoo Inc . into an Internet search partnership, capping a convoluted pursuit that dragged on for years and finally setting the stage for the rivals to make an all-out assault against the dominance of Google Inc.

Photo: Microsoft and Yahoo Agree Search Deal

The 10-year deal announced Wednesday gives Microsoft access to the Internet's second-largest search engine audience, adding a potentially potent weapon to the software maker's Internet arsenal as it tries to better confront Google, the leader in online search and advertising, The Associated Press reports.

Microsoft and Yahoo declined comment. The two companies have talked for months about cooperating in the online advertising market, dominated by Google.

Microsoft tried to buy Yahoo last year but its $47.5 billion bid was rebuffed and Yahoo's attempt to seal a search advertising deal with Google Inc. fell apart under regulatory scrutiny, informs Reuters.

Yahoo CEO Carol Bartz had said that by outsourcing the company's search business to Microsoft, Yahoo would be able to save between $500 and $700 million a year. However, by still staying in the search advertising business, the savings are expected to be lower, although Yahoo will likely be able to cut down on both data center and employee costs (Already, a steady stream of its top search engineers had left the company for Microsoft), Washington Post reports.