Microsoft is still in love with Yahoo. After attempting to buy Yahoo in the not so distant past (and failing), Microsoft announced that it now has forged a 10-year deal with Yahoo to allow them access to its search engine.

In simple terms, Microsoft will now power Yahoo! search while Yahoo! will become the exclusive worldwide relationship sales force for both companies’ premium search advertisers. So, Yahoo needs Microsoft to power its search engine? I’ve always thought that Yahoo is a search engine. Why the need for Microsoft?

In return, Yahoo will get 88 percent of the revenue for the first five year and will have the right to sell ads on Microsoft sites, including Bing. The deal is expected to add around $500 million to Yahoo’s operating profit.

The companies have established a website at http://www.choicevalueinnovation.com to provide consumers, advertisers and publishers with additional information about the benefits of the agreement.

The underlying implication here is that both Microsoft and Yahoo can now work together in attacking Google’s business (though we really doubt if they can do it even with this tie-up… just wait for Google’s next move).