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Initially, Google will provide a version of Google Mail using the @sky.com domain name, as well as a video-sharing service which will use Google’s video content tools.
In addition, the deal will see the two media giants collaborate on display advertising, with Google providing search advertising across BSkyB’s websites, with money generated by click-throughs to be shared between them.
The deal - following Google's huge ad partnership with News Corp - gives Rupert Murdoch’s company access to the UK’s fastest growing ad market, while potentially allowing Google access to the TV advertising market.
As The Guardian suggests, Google may use the viewing information gathered by Sky set top boxes to provide more targeted TV advertising.
There are also suggestions that BSkyB will look into creating an internet telephony service in conjunction with Google.