A possible deal between search engine providers Yahoo! and Google is drawing closer, according to sources close to the matter.Speaking to the Wall Street Journal, the insiders said that, following initial tests that yielded what were deemed to be positive results, both companies are keen to go ahead with the agreement.
Announced earlier this month, the potential alliance would see Yahoo! use Google's AdSense for Search service and is viewed by many as part of Yahoo!'s wider effort to escape Microsoft's current takeover bid.
Google spokesman Daniel Rubin revealed that the deal would see Google deliver relevant ads alongside Yahoo!'s own natural search results.
However, the overlap between the two companies could make it difficult for them to get an agreement past regulators.
Indeed, Microsoft has complained that such an alliance would consolidate over 90 per cent of search in Google's hands.
Commenting on this issue, the sources said that, in order to get around possible opposition, Yahoo! and Google are currently in the process of exploring ways in which legal problems could be addressed.
Among the potential plans being discussed is the option of limiting the partnership to specific groups of search queries or regions, they added.
Meanwhile, according to Citigroup Global Markets analyst Mark Mahaney, the agreement could see Yahoo!'s cash flow increase by over $1 billion a year because Google's system generates more revenue for each search query than Yahoo!'s.
