Yahoo jumps into bed with Google

It looks like the apparently eternal triangle of Yahoo, Microsoft and Google has finally been broken. Yahoo fought off Microsoft's attempts to acquire some or all of its assets, although in the process it upset shareholders who are suing it and demanding to see what went on behind the scenes.

Instead Yahoo has chosen to enter into an alliance with Google by which Google will serve adverts alongside Yahoo's search results and on some US and Canadian web pages.

Obviously, this is going to generate lots of accusations of monopolistic behaviour, given Google's extraordinary dominance of online search and advertising. In an attempt to head this off at the pass, Yahoo is claiming that its agreement with Google isn't exclusive and that it could even reach similar agreement with Microsoft - probably over Steve Ballmer's dead body, though.

Some shareholders are likely to be less than amused too: many will view this latest move as being a way to ward off Microsoft's unwanted attention. In particular shareholder/agitator/corporate raider Carl Icahn is probably going to be less than enthusiastic about the development.

Given the regulatory and shareholder antipathy (not to mention a truly furious Microsoft) that must be overcome before Google and Yahoo are able to celebrate their quasi-union, this saga could still run and run.

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