The Microsoft and Yahoo! deal is off. It’s water under the bridge living Microsoft with a disappointing note and Yahoo’s stocks plunging down. Top Yahoo executives leaving the company.
All that aside Yahoo and Google had announced a non-exclusive advertising service agreement where Yahoo could use Google’s advertising services in Yahoo’s web assets in U.S. and Canada. This gives Yahoo access to use Google’s Adsense / Adwords services throughout their site. Aspect to see Google Adsense in Yahoo’s search result pages some time soon.
In addition to that, both Yahoo and Google will work on enable interoperability between instant messaging service of both companies. This will result on a better broader online communication services. GTalk isn’t doing that well so this is a good thing for Google. You might be able to chat on your YM buddies on your GMail account in the future.