Yahoo reach deal with Microsoft to replace search with Bing!

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The Yahoo search engine could be obsolete in the near future, according to adage.com they are binning their search in favour of Bing and revenue from the ad sales.

Microsoft will not pay an upfront fee to Yahoo, and the focus of the deal is on sharing revenue between the two companies, said the source, who did not want to be identified because a formal announcement has not been made.

The news and details of the expected deal were first reported by the AllThingsDigital blog and Advertising Age.

Microsoft and Yahoo declined comment. The two companies have talked for months about cooperating in the online advertising market, dominated by Google.

Microsoft tried to buy Yahoo last year but its $47.5 billion bid was rebuffed and Yahoo's attempt to seal a search advertising deal with Google Inc fell apart under regulatory scrutiny.

Under the expected deal, Microsoft's new Bing search engine will power Yahoo's searches, according to Advertising Age, while Yahoo will handle the advertising sales, using Microsoft technology.

The deal should give Bing a giant boost in competing with Google's search engine. Google's search engine dominates the marketplace with 65 percent of U.S. Internet searches, according to figures provided by research firm ComScore. Last month, Microsoft had only 8.4 percent of the market and Yahoo 19.6 percent.