Google and Yahoo said Thursday that they had reached an agreement under which Google would deliver ads next to some of Yahoo’s search results and on some of its Web sites in the United States and Canada.
The nonexclusive deal is aimed at giving a lift to Yahoo’s finances, and the company said it would generate an additional $250 million to $450 million in operating cash flow in the first year.
The agreement will also strengthen Google’s dominance over the lucrative search advertising market. It was signed after Yahoo rejected a proposal by Microsoft to acquire both Yahoo’s search business and a minority stake in the company. The rejection appears to end months of on-again, off-again negotiations between the two companies.