Sunnyvale, Calif. - Following what is said to have been a successful week-long test, Yahoo (NASD: YHOO) is now seeking to partner with Google (NASD: GOOG) to provide ads alongside its search results, the Wall Street Journal reported. The tie-up with Google would be a key element to a prospective deal where Time Warner (NYSE: TWX) would merge with Yahoo, and take a stake in the company, according to Reuters.

With search ads taken care of by Google, Yahoo could then concentrate on its brand advertising business.

That deal is seen as a buttress against Microsoft's (NASD: MSFT) unsolicited bid for Yahoo, which Yahoo has said undervalues the company.

However, the ad deal with Google could easily be undone should Microsoft be successful in its advances, the Journal reported.

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http://snipurl.com/24s0x (Reuters)