Last Thursday Yahoo and Google announced an agreement under which Google ads would be displayed alongside Yahoo’s search results and on some of its Web properties in the U.S. and Canada. According both parties their non-exlusive agreement, Yahoo will be able to display paid search results from Google, other third parties, and Yahoo’s paid ads. Yahoo keeps control and will be able to select the search term for which and the pages that will offer to Google paid search ads. According to Yahoo media press, “the first 12 months Yahoo expects the agreement to generate an estimated $250 million to $450 million in incremental operating cash flow”. The agreement allows both parties to terminate the agreement but it also requires Yahoo to pay a termination fee – if the agreement ends within 24 months – $250 million.
Even though both parties will like to start their non-exclusive agreement they will have to delay their plans for up to three for the U.S. Department of Justice to review and approve the arrangement.