REDMOND, Wash.–After months of fits and starts, Microsoft and Yahoo on Wednesday announced a 10-year search deal that will see the two companies join forces to take on Google.

“In simple terms, Microsoft will now power Yahoo search while Yahoo will become the exclusive worldwide relationship sales force for both companies’ premium search advertisers,” the companies said in a joint statement. The deal is expected to go into effect in 2010 and improve Yahoo’s profitability, though not its revenue, the companies said.

Less expansive than the all-out, $44 billion acquisition Microsoft proposed last year–and even than some of the search partnerships once discussed–the deal does allow the companies to share resources and combine. Even together, however, the two companies have only about 30 percent of the search market compared to Google, which has more than twice that amount.

“This agreement gives us the scale and resources to create the future of search,” Microsoft CEO Steve Ballmer said in a statement. “Success in search requires both innovation and scale. With our new Bing search platform, we’ve created breakthrough innovation and features. This agreement with Yahoo will provide the scale we need to deliver even more rapid advances in relevancy and usefulness.”

Yahoo CEO Carol Bartz, meanwhile, said that the move will help Yahoo focus on other areas, also adding that the deal has the full support of the company’s board (lest anyone wonder what Carl Icahn thinks about the more limited deal).

“This is a significant opportunity for us,” Bartz said. “Microsoft is an industry innovator in search and it is a great opportunity for us to focus our investments in other areas critical to our future.”

Read More @ CNET

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