Merely a few short weeks after Microsoft officially withdrew it’s bid to purchase Yahoo, Google has come into the picture with a corporate mashup that is sure to peak the interest of Capital Hill’s antitrust legions. 

June 12th, Yahoo put out a press release stating its intention to “strengthen [it's] competitive position in online advertising through [a] non-exclusive agreement with Google”.  By the terms of the agreement, Yahoo will now serve Google Adwords advertisements alongside their own, both in search results and on Yahoo’s thousands of highly-trafficked (but poorly monetized) content pages. 

Ads will also be shows on member’s sites within Yahoo’s Publisher Network, which has never seen the adoption of Google’s Adsense program, but still gives Google a boost in content ad placement inventory. 

This agreement is non-exclusive.  Meaning, Yahoo is free to pursue similar deals with other ad providers.  They are even still free to pursue acquisition by Microsoft, although that would carry a $250 million penalty (termination fee).

According to an article in the Wall Street Journal, Yahoo claims that by better monetizing searches and other page views on their properties, they are projecting an extra $800 million in annual revenue.  And, that’s just the beginning— integrating other Google ad serving technologies on to Yahoo’s vast (and widely-used) user pages would certainly mean other opportunities.

It is all good news for Yahoo, whose leadership (Jerry Yang) have come under intense scrutiny from Wall Street, investors and Carl Icahn for missing an opportunity to sell the company for top dollar and subsequently causing a dramatic drop in market cap.  The deal is a positive move to add revenue security in an uncertain time for the internet sector.

Certainly, this deal is going to be reviewed under an electron microscope by fair-trade officials and monopoly watchdogs at the Justice Department.  In fact, Yahoo has claimed that the deal will not go into effect for as long as three and a half months to permit time for thorough regulatory investigation.  Likely threatened by a Google-Yahoo partnership, Microsoft is expected to apply significant political pressure to add further hardship to making the execution of the deal a reality.

So, as a Google/Yahoo mashup appears to be in our near future, I propose the following names:

• Yahoogle
• Goohoo