Yahoo signs 3-year deal with Google

Yahoo Inc CEO Marissa Mayer announced on Tuesday that the company has signed a 3-year deal with Google to work together in Internet search and advertising, the Salt Lake Tribune reported. The announcement followed the disappointing report of Yahoo’s performance in the third quarter.

According to the report, Yahoo’s revenue, after paying ad commissions, fell from the same period last year to $1 billion.

SLTrib further said that the said deal is actually Yahoo's second attempt to associate with Google. Similar effort was made back in 2008 when Yahoo tried to strike a deal with Google as part its defense against a takeover attempt by Microsoft Corp. However, the attempt failed after the U.S. Justice Department threatened to block the partnership on the grounds that it would thwart competition.

Government’s approval might be easier to get this time around as Yahoo's share of the Internet search market has reduced considerably during the past couple of years, SLTrib said. Although Google still processes roughly the same search request volume as it did during the first deal attempt.

While awaiting the approval, Mayer is pledging to trim the company's expenses as revenue falls, and focus on fewer products with the remaining workforce.

"We see a unique moment and opportunity for Yahoo as we move into 2016 to narrow our strategy and focus on fewer products with higher quality to achieve better growth and better results," Mayer said during a review of the third-quarter results and promised to elaborate on her plan by the time Yahoo releases its Q4 results in 2016.

Yahoo's similar deal with Microsoft will not be affected by the Google pact, Yahoo said, as reported by The Verge. Yahoo made the 10-year deal with Microsoft in 2010 to boost its search engine in exchange for giving the latter a single-digit cut of search ad revenue. However, the arrangement was loosened in April with the addition of a termination clause, according to which either company could walk away from the deal with four months' notice.

"In October, the Company reached an agreement with Google that provides Yahoo with additional flexibility to choose among suppliers of search results and ads," Yahoo wrote in its earnings release. "Google’s offerings complement the search services provided by Microsoft, which remains a strong partner, as well as Yahoo’s own search technologies and ad products."

SLTrib further noted that Yahoo will still use Microsoft's Bing search engine, but will also include results from Google's search engine if it is able to get an antitrust approval of its new deal this year.