Manila Freelancer

Yahoo and Microsoft ended talks as the Web pioneer agreed to let archrival Google sell search ads on its site, the companies said on Thursday.

Separate statements from Microsoft and Yahoo signaled a more permanent rift between the two after months of on-again, off-again talks. It also heightened pressure on Yahoo to outline an alternative strategy. Yahoo shares fell 10 percent.

Yahoo said it had agreed to let Google put search ads on its site in what it called an $800 million annual revenue opportunity that would boost cash flow by $250 million to $450 million in the first 12 months.

Yahoo’s ads and Google’s would be pitted against each other in an auction style process that could make a deal easier to pass regulatory approval. [More]

Microsoft said Wednesday it has adopted a new strategy to offer cash rewards to users in its fight against Google for the lucrative Internet search and on-line advertising business.

Microsoft Chairman Bill Gates, at an annual conference for on- line advertisers, announced the company’s “Live Search Cashback” service, which rewards on-line shoppers with a cash refund.

“We want to earn your loyalty and reward it with cashback savings for your everyday on-line shopping,” the giant software maker said in a statement posted on its company website.

Under the new initiative, people who use Microsoft’s Live search engine to purchase products on-line could receive cash rebates, from a 5 percent rebate on a Canon Powershot digital camera to a 15 percent on a pair of Adidas running shoes.

To receive the rebates, users have to register for a free account with Microsoft. Once the total cash-back rebate amount equals 5 dollar or above, the money can be deposited in a bank account or a PayPal account or sent in a check in the mail.

The cashback service comes as Microsoft is reportedly negotiating with Yahoo for a search advertising deal to gain strength in its competition with Google, which dominates the Internet search market.

Microsoft withdrew it 47.5-billion-dollar offer to buy out Yahoo earlier this month, after the Silicon Valley search engine insisted on a higher price.