Microsoft and Yahoo seal web deal

Yahoo and Microsoft have announced a long-rumoured internet search deal that will help the two companies take on chief rival Google.

Microsoft’s search engine will power the Yahoo website and Yahoo will in turn become the advertising sales team for Microsoft’s online offering.

Yahoo has been struggling to make profits in recent years.

But it rebuffed several takeover bids from Microsoft in an attempt to go it alone.

“This agreement comes with boatloads of value for Yahoo, our users, and the industry. And I believe it establishes the foundation for a new era of internet innovation and development,” said Yahoo chief executive Carol Bartz.

The deal became possible after Yahoo’s co-founder Jerry Yang stepped down as chief executive of the company.

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