Yahoo finally completed a search ad pact with Google as Microsoft abandoned its takeover pursuit, The Wall Street Journal reported.

Yahoo said Thursday that under the new ad pact, it will display some ads sold by Google. Yahoo estimated it would generate $800 million revenue annually with improved monetisation of certain types of searches.

Both companies expressed their interests in expanding the limited partnership, possibly into display advertising.

According to Yahoo President Susan Decker in an interview, the deal is like "a bridge" that will help the company build up a converged display and search business.

According to Yahoo, either party can end the agreement in the event of a change in control, which, however, left some room for Yahoo to pursue another deal, The Wall Street Journal reported.

This effort showed Yahoo's future still remains unclear. It has to prove that its independent strategy can work while competition heats up.

On the other hand, Microsoft's tactics seem to badly backfire. Without gaining Yahoo's audience and online search capabilities, Microsoft now is in the disadvantageous position directly against the archenemy, according to the article posted on MediaInfoCenter.

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