Yahoo Inc. moved closer to outsourcing its search advertising to Google Inc. after an initial test of the system yielded what the two firms deemed positive results, people familiar with the matter said.
A partnership could give Yahoo some needed leverage as it tries to ward off an unwelcome $42 billion bid from Microsoft Corp. Some view the potential pact as mere gamesmanship, particularly in light of antitrust concerns that a Google-Yahoo linkup would likely raise.
A search-ad deal could complicate Microsoft’s efforts but is unlikely to derail its plan. Yahoo could simply pull out of the partnership should it agree to be taken over by Microsoft, people familiar with the matter say.