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Yahoo to test ad outsourcing with Google

Showing it has alternatives to Microsoft’s hostile merger bid, Yahoo (GOOG) is talking to Google (GOOG) about a joint search-advertising trial, according to a report posted on The Wall Street Journal’s site.

The discussions with Microsoft’s biggest rival come less than a week after Yahoo was given a 3-week deadline by Microsoft to come to the table and negotiate.

The tests are to be limited and not nessarily a deal killer for the Microsoft/Yahoo takeover, but it could lead to a larger partnership between the two search engine giants, the Journal reports.

One of the issues the outsourcing of search ads to Google would address is the heavy costs Yahoo faces in hosting and powering its own server facilities and infrustructure.

Yahoo, along with large shareholder Legg Mason, are attempting to show that the company can thrive independently if necessary.