So finally Yahoo has found a suitable mate. And no its not Microsoft which will have the pleasure of dating the internet pioneer, but the world's largest search engine -- Google. Though the deal is "non-exclusive", it gives enough room to Google to score points against MS. As per the agreement Yahoo will run ads supplied by Google alongside Yahoo!'s search results and on some of its web properties in the United States and Canada. The most important thing about this agreement is that its not an exclusive agreement, meaning Yahoo can display ads from other third parties, and Yahoo!'s own Panama marketplace.

The main reason why Yahoo cracked ad-deal with Google is that it provides ample opportunity to mint some hard cash. Yahoo said, at current monetization rates, this is an approximately $800 million annual revenue opportunity. And in the first 12 months following implementation, Yahoo! expects the agreement to generate an estimated $250 million to $450 million in incremental operating cash flow.

So how will this contract run?

Under the terms of the agreement, Yahoo! will select the search term queries for which - and the pages on which - Yahoo! may offer Google paid search results. Yahoo! will define its users' experience and will determine the number and placement of the results provided by Google and the mix of paid results provided by Panama, Google or other providers. The agreement applies to paid search and content match and does not apply to algorithmic search. The agreement also applies to current partners in Yahoo's publisher network.

[Press Release]