Yahoo has signed up for Adsense:

By offering Google’s industry-leading technology to Yahoo!, the whole system becomes more efficient, and everyone benefits.

This is efficient in the same way that having everyone run Windows is efficient. Hmmm.

Google observes that the deal is non-exclusive; Yahoo can still sell its own ads, etc etc. I tend to agree with Om Malik, who says:

In my opinion, with this deal, Yahoo has publicly acknowledged that Google is superior to them when it comes to search & contextual advertising.

Yes. But how much does that matter? Outsourcing what you are less good at, in order to concentrate on core competencies, can be a smart business move.

The snag here: advertising is Yahoo’s primary business activity. Here are its revenue figures for the first quarter 2008:

• Marketing services: $1,818 million
• Fees: $245,milion

Outsourcing the core of your business is bad PR.