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Google, Yahoo Partner on Search

Yahoo now has partnerships with both Google and Bing providing the site with ads and search capabilities.

Yahoo revealed Tuesday it has partnered with Google in an advertising pact that links the fortunes of Silicon Valley's two search engine giants.

The three-year deal means Google will help power Yahoo's search engine and provide it with advertisements. Google will pay Yahoo a percentage of revenue from ads, and Yahoo will pay Google for requests for word or image search results, according to Yahoo's filing with the Securities and Exchange Commission.

Yahoo, which is already partnered with the third of the top three search engines -- Microsoft's Bing -- said the new Google deal gives Yahoo "additional flexibility to choose among suppliers of search results and ads."

Having three different search engines at its disposal "really improves search," Yahoo CEO Marissa Mayer said in a videoconference Tuesday, providing the company "greater stability as well as choice and a better user experience."

Yahoo has discretion to select which search queries to send to Google and will not have to send a minimum number. The price and further specifics of the deal were not disclosed.

The struggling Sunnyvale company revealed the search partnership, signed Oct. 1 but still awaiting regulatory approval, as it announced its third-quarter earnings and revenue that missed Wall Street expectations.

Yahoo reported a profit of $76 million, or 8 cents a share. Adjusted earnings were 15 cents a share, less than the 17 cents anticipated by analysts.

In the second quarter last year, Yahoo reported a profit of $6.8 billion because of the sale of a large stake in Chinese e-commerce company Alibaba. Yahoo plans to return to shareholders the rest of its Alibaba holdings -- more than 380 million shares -- in a tax-free spinoff planned for this winter.

On Tuesday the company reported $1.23 billion in revenue, less than the $1.26 billion expected from analysts polled by Thomson Reuters.

Yahoo stock was down more than 3 percent in after-hours trading.

©2015 San Jose Mercury News (San Jose, Calif.) Distributed by Tribune Content Agency, LLC.