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Google and Yahoo confirmed the rumors: The two companies forged an agreement under which Yahoo will display ads served by Google alongside its own search results.
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The companies also vowed to work toward interoperability between their instant messaging services.
Under the non-exclusive agreement, Yahoo is free to use competitors' services; and the deal is good for four years, with two potential three-year renewals.
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(Google had about 62 percent share in April, while Yahoo had 17.5 percent, according to Nielsen Online.)Although the agreement was only signed this afternoon, it had been loosely discussed since February."We started talking to yahoo in early February," Google CEO Eric Schmidt said on a conference call. There was a series of conversations – the most entertaining ones were done in an empty building that Google owned in an unknown and unfindable location for most of us – Jerry [Yang] and Sue [Decker] and our folks would show up – some on bicycles – to discuss what was possible.. Over the last few weeks, Jerry Yang in particular, and I have had a series of conversations .