This evening has seen an intriguing announcement by Yahoo, but not one that will necessarily please marketers - it is to run an experiment with Google to see if it can boost its search ad earnings.

A release from the company said it would begin a limited test of Google's AdSense for Search service, which delivers contextual ads to third party sites.

Analysts have long suggested that Yahoo outsource its search advertising to Google and the company is reportedly in talks to do so in Europe. However, it is keen to play down the prospect of an expanded deal.

In the release, Yahoo said the test " does not necessarily mean that Yahoo! will join the AdSense for Search program or that any further commercial relationship with Google will result".

"The test will apply only to traffic from yahoo.com in the U.S. and will not include Yahoo!'s extended network of affiliate or premium publisher partners.

"The test is expected to last up to two weeks and will be limited to no more than 3% of Yahoo! search queries."

The trials, first reported earlier today by the Wall Street Journal, clearly show Yahoo is reviewing all alternatives to its potential merger with Microsoft.

The paper said the arrangement would not stand in the way of any eventual takeover deal by the software giant. But with the two companies in stand-off mode, it won't do Yahoo any harm to remind MS it has other options.

Whether an expanded agreement would be good for competition is another matter.

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Published 9 April, 2008 by Richard Maven

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