Wall Street Journal has reported that Yahoo! Inc, and Google have got closer to a partnership deal after the successful testing of Google advertisements in Yahoo! SERPS (Search Engine Result Page). On April 10th 2008, we had reported to our readers that Yahoo! was going to test Google's ads in its SERPS. This latest update comes as a possible boon for Yahoo!.

Yahoo! has been looking for ways to fend off Microsoft's takeover bid which at present stands at $42 billion or $29.26/share. Both these Internet giants (Yahoo! & Google) are looking for ways to link-up without causing any legal implications.

According to some sources, if this deal materializes, it still won't affect Microsoft's chances for a takeover. Because, if the Yahoo! Stockholders agree to Microsoft's offer then Yahoo! will simply pull out of the Google partnership. As of now, a deal between Yahoo! And Google seems quite likely, as Yahoo! had said some time ago that the Google ad test would be evaluated for a possible search-ad outsourcing arrangement.

Due to the fact that Google generates more revenue for search queries than Yahoo!, an alliance between the two could bring in as much as $1 billion to Yahoo's annual cash flow. However, the deal would be limited to specific groups of search queries or regions to avoid any potential regulatory problems.