Yahoo Makes Ultimate Concession, Tests Google Ads

If Yahoo’s movements in recent weeks have been a series of chess moves in its slow-moving stand-off with Microsoft, this one may be the equivalent of promoting a pawn to queen. It’s also a very tough pill to swallow.

Yahoo has agreed to conduct a limited test of Google’s search ads on its own results pages. The difficult decision comes more than a year after Yahoo released its Panama platform for search ads monetization, which itself was the product of many months of intensive development.

The two-week experiment applies only to Yahoo search results in the U.S., and will be capped at 3 percent of Yahoo’s total search queries. In a brief statement today, Yahoo insisted the trial does not “necessarily” mean the company will join Google’s AdSense for Search network.

In opposition, Microsoft General Counsel Brad Smith issued a statement this afternoon saying any formal agreement between Google and Yahoo would amount to a virtual monopoly on search ads.

“This would make the market far less competitive, in sharp contrast to our own proposal to acquire Yahoo,” he said. “Our proposal remains the only alternative put forward that offers Yahoo shareholders full and fair value for their shares, gives every shareholder a vote on the future of the company, and enhances choice for content creators, advertisers, and consumers.”

Last weekend Microsoft issued an ultimatum to Yahoo’s board, giving it three weeks to approve his company’s $44.6 billion acquisition bid.

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