Microsoft, Yahoo Finalize Search Deal (Really!)

The storyline that launched a thousand rumors has finally led to an actual real-world business deal. Microsoft and Yahoo announced this morning that Microsoft will now power Yahoo search while Yahoo will become the exclusive worldwide relationship sales force for both companies.

"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 Officer Carol Bartz.

"Through this agreement with Yahoo!, we will create more innovation in search, better value for advertisers and real consumer choice in a market currently dominated by a single company," said Microsoft CEO Steve Ballmer. "This agreement with Yahoo! will provide the scale we need to deliver even more rapid advances in relevancy and usefulness. Microsoft and Yahoo! know there's so much more that search could be. This agreement gives us the scale and resources to create the future of search."

It's not immediately clear whether the search and advertising deal will have any iimplications on the back-end infrastructure required to power the two companies' operations, and how it might impact their data center requirements.

See coverage at TechCrunch, Search Engine Land and a roundup from TechMeme.