Microsoft and Yahoo extend contract for web ads

Microsoft has extended its partnership with Yahoo to deliver sponsored search results on its US and international MSN sites,...

Microsoft has extended its partnership with Yahoo to deliver sponsored search results on its US and international MSN sites, despite the software manufacturer's recent declarations that it intends to be a major force in the search market.

Microsoft has extended its agreement with Yahoo subsidiary Overture Services until June 2006 to deliver the pay-for-performance results.

The agreement was initially undertaken in 2001 and was due to expire in June 2005, Overture said. There has been no changes to the terms of the contract, it said. Financial details were not disclosed.

Microsoft's decision to lengthen its search partnership with Yahoo comes at a time when the software manufacturer is sharpening its own tools and expertise in the area.

Microsoft rolled out a beta of its long-awaited search technology last week, while company executives proclaimed their intentions to take on search leaders Google and Yahoo.

Experts have said that the company's search technology as still in callow form, however, and this factor may have contributed to the decision to extend its agreement with Yahoo.

Under the extension, Overture will continue to provide sponsored results to MSN sites in the US, Canada, Europe and Asia.

Scarlet Pruitt writes for IDG News Service

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