Yahoo, Microsoft may sign online ad deal

Microsoft and Yahoo may finally sign an online advertising deal as early next week, as both companies have tried to complete a deal since mid-2006.  

After the first round of negotiations fell through, Microsoft tried to buyout the company, but the bid was rejected by the Yahoo board — leading to a shakeup within the board of directors.  Yahoo then tried to agree to a search advertising deal with Google, but federal scrutiny led to the deal eventually falling apart.

Yahoo CEO Carol Bartz, who replaced former CEO Jerry Yang, will work with Microsoft as long as they’re able to agree upon a fair deal.  Yahoo hopes to have access to Microsoft search data — including its Bing.com search engine — which will help the company better select advertising to display online.

Microsoft’s Steve Ballmer has been extremely adamant about wanting to secure a deal with Yahoo, especially as both companies continue to struggle against Google.  Last May, executives from the two companies spoke during the D: All Things Digital conference, and again spoke on several different occasions over the next few months.

Analyst believe, assuming the deal is completed, Microsoft will give Yahoo a lump sump of money and possible guaranteed funds over the next few years.

The deal was first reported on the All Things Digital blog, and although no sources are named, AllThingsD is a very well respected web site.  I’m a fan of the site, so if Kara Swisher says a deal is pending, then I’ll believe a deal is likely in the near future.