When Google met Yahoo!

SEARCH engine rivals Google and Yahoo! announced Thursday that they had reached an agreement under which Google would deliver ads next to some of Yahoo!'s search results and on some of its Web sites in the United States and Canada. The news came after Yahoo! said it had failed to persuade Microsoft to renew its bid to buy all of the Internet company.

Yahoo! shares sank as low as $22.50 on news of the Microsoft talks failing, so will this new deal offer new hope to Yahoo! shareholders? CNN explains what the agreement means for Internet users.

What does the deal involve?

Yahoo! has agreed to let Google put search ads — advertisements placed next to search results — on its site in what it described as an $800 million annual revenue opportunity that would boost cash flow by $250 million to $450 million in the first 12 months.