You all know that Bing is Microsoft’s brand new Search Engine with a billion dollar investment to beat the Monopolistic Google. Which has about 67% of Search Market, and when it comes to Internet Search, there a really huge amount involved in it.

Now, Microsoft and Yahoo will work together for Internet Search, that means Microsoft will be using Bing  on Yahoo. This will help them in gaining new users.

They have made a 10 year deal in which Yahoo will take 88% of the Search Advertising profit for five years, also, it can sell ads on some of Microsoft Sites.

Yahoo estimated the deal will boost its annual operating profit by $500 million and save the Sunnyvale, Calif.-based company about $200 million on annual capital expenditures because it won’t have to invest as much in its own search technology. An unspecified number of Yahoo engineers will lose their jobs as the company scales back, Yahoo Chief Executive Carol Bartz told analysts in a Wednesday conference call.

The deal isn’t expected to close until early next year, and then it could take another two years before all the pieces of the partnership are in place. The companies first will give antitrust regulators time to review the possible effects on the Internet ad market. Then they will need time to stitch together their different technologies.

"I think the market hasn’t figured out that there’s not much I can do with an upfront payment," Bartz said in a Wednesday interview.

"It’s very clear that (in this deal) I get virtually all my revenue at no cost. That’s what’s important on an ongoing basis. A one-time upfront payment, what am I going to with it? Collect interest on it every year? That doesn’t help me with" Yahoo’s finances

On the other side, Google is trying to Hit Microsoft by Launching a free Operating System of low end PCs, called Chrome OS. but it will be available in the market by the end of 2010, So, Microsoft can affect Google’s main Business Which is Search Engine.