Microsoft Yahoo Partnership a Done Deal?

The rollercoaster negotiations between Microsoft and Yahoo may be coming to an end. The two companies are ready to announce a search and advertising partnership this week, perhaps as early as Wednesday, according to reports in AllThingsD, which quoted “multiple sources close to the situation,” and the Reuters news service.

Contrary to early reports, Microsoft (NASDAQ: MSFT) will not pay an upfront fee in the deal, according to a source quoted by Reuters. Early rumors said Microsoft would pay hundreds of millions of dollars up front to Yahoo in addition to a revenue sharing agreement.

Yahoo has about 20 percent of the search market, while Microsoft’s share is just under 10 percent, according to industry estimates that give Google (NASDAQ: GOOG) most of the remaining 70 percent.

A Yahoo (NASDAQ: YHOO) spokesman told that the company would have no comment in line with its standard practice of not commenting on “rumors and speculation.”

The deal, if it is announced, will be “less sweeping than originally conceived,” according to AllThingsD.

Bartz has made it clear Yahoo would demand a pretty penny for its search business, which is reportedly why negotiations with Microsoft have been so thorny. At last month’s shareholders meetings, Bartz emphasized Yahoo’s growth potential and said its problems had more to do with execution.

“We already have our vision — we know what we’re doing,” Bartz said. “If we could double our audience, advertisers would flock to us. It’s about growth. The vision is there. We have an execution problem.”

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