dailyApps

Hot on the heels of the 3days ultimatum given to Yahoo by Microsoft, Yahoo is doing everything it can to subvert the deal. Yesterday it acquired analytics startup Indextools and today it has announced a search advertising deal with Google.

Here’s the press release :

Yahoo! Inc. , a leading global Internet company, announced today that it will begin a limited test of Google Inc.’s AdSense for Search service, which will deliver relevant Google ads alongside Yahoo!’s own search results. The test will apply only to traffic from yahoo.com in the U.S. and will not include Yahoo!’s extended network of affiliate or premium publisher partners. The test is expected to last up to two weeks and will be limited to no more than 3% of Yahoo! search queries.

Looks like Yahoo has finally given up on Panama. A report from last year shows Google’s RPS (Revenue Per Search) at $25, versus $16 for Yahoo. So if the RPS has remained more or less the same for the past year, this deal could mean more cash in Yahoo’s registers. Google’s earning atleast 30% more than Yahoo, and considering that Yahoo’s major source of income is from advertising, this deal could help the company deliver a better than expected Q2 earnings call.

Microsoft’s reaction to this deal was on the expected lines, saying that it would give Yahoo+Google an unprecedented market share of nearly 90% in online advertising, which it thinks isn’t good for the internet.

Eventhough Yahoo has mentioned that this is a test run and will last for only two weeks, at the moment it looks like Yahoo is looking for a long term relationship with Google rather than being acquired by Microsoft.

The evil side of me thinks that, Google will give higher quality ads than usual so that it could win the confidence of Yahoo, and in turn stop the Yahoo - Microsoft merger from happening.

What do you reckon will be the implications of this deal in the trilogy of Google-Yahoo-Microsoft?