After a long time talks and billion dollar buyouts Microsoft and Yahoo have finally come to an agreement. Yahoo CEO Carol Bartz and Microsoft’s Chief Executive Steve Balmer came to an agreement today at 5:30 am PST. Carol Bartz, formally the CEO for Autodesk took over in January this year and has already struck a deal with the IT giant.

“Microsoft and Yahoo know there’s so much more that search could be,” said Microsoft Chief Executive Steve Ballmer. “This agreement gives us the scale and resources to create the future of search.”  In return for turning over promotions to its search engine to Bing, Yahoo will get to keep 88 percent of the revenue from all ads that run alongside search requests on its site for the first five years of the deal. Yahoo also will have the right to sell ads on some Microsoft sites. The details of this deal have yet to be released but this is going to be changed over the next 24 months until Yahoo’s backend is Microsoft ready. There was hopes for some sort of cash up front payment by the share holders, but it will be all revenue share.

There are still many questions, like what about the Yahoo data center planned for 2011 in Lockport NY? Is it still going to come to Western New York and add 75 jobs in the dying market?

All of this is plans to attack the search market share, which is being ran by Google with 65% search market share.