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You'll have noticed that Microsoft is now going to be powering Yahoo's search. Well, it will be once the deal is done.To celebrate, the two companies set up a joint website to announce it. They have finally got it together on advertising and search engine operations, with a view to take on the might of Google. Under this deal Yahoo is supposedly managing the ads side of the business and Microsoft will provide the necessary search engine platform. Rumours are that the two will share the revenues.

Microsoft has been chasing Yahoo around the corporate bedroom for years, but each time a consummation looked nigh, Yahoo proclaimed itself too expensive or just not interested and the deal fell apart.

An 18-month odyssey.
It was a partnership that was a long time in the making. Microsoft's search market share has been slipping for more than two years, and the company has struggled to make its online advertising unit profitable. Meanwhile, Yahoo, once the search market leader, dropped to a distant second place behind leader Google by 2007.

The dealings between the two companies began Feb. 1, 2008, when Microsoft made an unsolicited $44.6 billion cash and stock bid for Yahoo. A week later, Yahoo rejected the bid, saying the offer "massively undervalues" the company.

In June of last year, Microsoft said it was no longer interested in acquiring Yahoo outright, but would like to enter a deal for Yahoo's search advertisement business.

Bartz and Ballmer said those preliminary discussions involved more cash up front for Yahoo but a less revenue sharing. Bartz said Yahoo insisted on a higher revenue number so it could invest in its long-term projects like its core online media businesses.

Though many analysts speculated that Microsoft's immediate success with its Bing search engine, unveiled last month, was the final nail in the coffin, Bartz said there was no one thing that pushed the deal through.

"It was the understanding and trust that we could have a partnership, and that takes time," said Bartz. "Finally the comfort level was there, and the proverbial snowball went down the hill. Once we reached a point in which it was clear that a deal was advantageous to both companies, we moved forward."

Ballmer said, for Microsoft, the deal wasn't better than the original revenue-sharing proposal, "just different."