Source: Reuters

Yahoo has given the public its first glimpse of its new ad partnership with Google in a regulatory filing, though anyone looking for the nuts and bolts of the tie-up will be a little disappointed with the heavily redacted submission to the Securities and Exchange Commission.

Throughout the document, omissions appear denoted with an asterisk, which indicates that "Confidential treatment has been requested with respect to the omitted portions," according to the filing.

The advertising alliance, announced in June, will see Google (NASDAQ: GOOG) providing a certain number of text ads next to the results pages of Yahoo's (NASDAQ: YHOO) search engine. Yahoo has said that it expects the agreement, which it made public the same day it announced that acquisition talks with Microsoft (NASDAQ: MSFT) had ended, will bring in $250 million to $450 million in operating cash flow in the first year.

Several subsections detailing the agreement are omitted entirely, and throughout the filing whole clauses or pertinent details have been redacted, such as the minimum number of ads that Yahoo would import from Google.

Because the ad partnership was a material agreement, Yahoo was obligated to make the SEC filing, but in doing so, it made its case to the agency to withhold information that would divulge details of its negotiations with Google.

"The information that's redacted is what we call competitively negotiated sensitive information," Yahoo spokeswoman Tracy Schmaler told InternetNews.com, explaining that it is "akin to parties not negotiating deals in public."

"Because what we file with the SEC is public, we have to keep that confidential," Schmaler said.

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The SEC filing lays out a payment plan -- with the crucial revenue numbers omitted -- that will have Google compensate Yahoo with an undisclosed percentage of its ads each month, and provide a report detailing gross revenue from the ad sales and Yahoo's percentage.

While the revenue split remains unknown, the document includes the provision that Google may cancel the deal if gross revenue for the trailing four months is less than $83,333,333.

Google will not be responsible for compensating Yahoo for ads placed in error, such as through invalid queries, or any other activity that comes under Google's policies on click fraud.

Under Section 3 of the filing, titled "Other Business Opportunities," Yahoo omitted the first three subsections before describing some of the conditions about the interoperability of the two companies' instant messaging clients. The date when Yahoo plans to have the systems connected, however, was also struck from the record.

The filing explains that the ads that Yahoo imports from Google will have to adhere to Google's brand-treatment guidelines and comply with its technical requirements.

The section on intellectual property outlines Yahoo's obligation not to attempt to reverse engineer or derive the source code any of Google's technology that it might access through the arrangement.

Also, in what looks to be a nod to antitrust concerns, the filing includes a partially redacted subsection noting that Yahoo competes with Google in search advertising, and that "Yahoo will continue to develop, create, operate and improve technology, products, features and services similar to the services [provided by Google] and...". The rest of the subsection is redacted.

In announcing the deal, Google and Yahoo said they would postpone implementation for at least three months to accommodate a regulatory review. Critics of the deal, including Microsoft, have warned against the two largest players in the search advertising market joining forces. Despite the flexible structuring of the nonexclusive deal, they fear that it could reduce the incentive for advertisers to spend on Yahoo's Panama platform, shifting more of their budgets toward Google.

Search engine marketers commonly advise their clients to spend about 70 percent of their budgets on Google, a proportion that some predict will increase once this deal takes effect.

The Department of Justice opened a formal review of the deal in June. More than a dozen states' attorneys general have since opened an inquiry into the matter.

In addition to the antitrust concerns, Microsoft has raised the issue of consumer privacy, warning that its two rivals could pool their immense troves of consumer data, creating detailed profiles of millions of users. In response to a broad congressional inquiry into online privacy safeguards at dozens of Internet companies, Yahoo on Friday announced that it would start giving users the choice of opting out of behavioral targeting on the Web sites it owns.

Schmaler said that the redacted information from the SEC filing is not related to the regulatory review, and that Yahoo is continuing to cooperate with the Justice Department.