Yahoo and Google strike a deal

June 13, 2008, 12:07 AM UTC

By Yi-Wyn Yen

Yahoo’s shares climbed slightly in after-hours trading on news that the company and Google struck an online advertising partnership.

The Internet portal announced it would begin using Google’s search advertising technology to help grow its profits. The news came just hours after Yahoo (YHOO) said its talks with Microsoft (MSFT) were over. The news that a Microsoft deal had reached a dead-end drove Yahoo’s stock down 12% in afternoon trading Thursday.

Yahoo inked a non-exclusive arrangement with Google (GOOG) to use its text-based ads on its own web properties as well as on its search results. Yahoo said the deal would generate an estimated $250 million to $450 million in operating cash flow in the first year.