May 16, 2008 11:50 AM PDT

Yahoo-Google ad deal 'still on track'

Posted by Stephen Shankland

Carl Icahn notwithstanding, Yahoo's deal to use Google search advertisements is still a go.

The partnership, which is designed to increase Yahoo's ad revenue, is "still on track," a source familiar with the partnership said, and an announcement is expected next week. That aligns well with reports in the New York Post and Reuters.

Take this schedule with a grain of salt. I've been snooping around on this particular deal for a while now, and plans to announce it have slipped several times. Jerry Yang and Yahoo's other top executives are reckoning with Icahn, which has to be consuming a lot of time.

Microsoft Chief Executive Steve Ballmer lambasted the Yahoo-Google ad deal as handing over even more search-ad dominance to Google and, in effect, making Yahoo vastly less desirable. And there are antitrust concerns, though Google executives seem to think it's not a big worry.

Even if the deal goes through and Icahn's agitating yields a new deal with Microsoft, it's possible that Yahoo could just switch it off without too much harm done. Even a short-term deal might well the engineers who worked long and hard on Yahoo's Panama search-ad system to spruce up their resumes, however.