So when will we see it? Think mid-April.

One good bet is at Chirp, the company’s developer conference four weeks from now. That would make sense because the search ad strategy Twitter is working on–a play on Google’s (GOOG) AdWords/AdSense model–is very much tethered to the third-party software and services that distribute the Twitterstream.

Another educated guess: Trade magazine Advertising Age is hosting its Digital Conference in New York on April 13 and 14–just before the Chirp conference. I’ve talked to two sources familiar with the company who expect the announcement to come during that event. It’s worth noting that Dick Costolo, Twitter’s chief operating officer, and the man who has overseen the ad strategy, is a keynote speaker on April 13.

The required caveat: Twitter’s ad strategy also requires a lot of work–rounding up hundreds or thousands of advertisers to “seed” the system with their ads at launch, for instance–so no matter when the company announces the platform, it may take a while to roll out. The most definitive answer I’ve heard is, and remains, “the first half of 2010.” So be patient.

Meanwhile, the announcement that Twitter did make today won’t be of interest to those of you who aren’t publishers. For those who are: The company is making it easier to integrate Twitter with your pages. And there are some other bell and whistles. For instance, you’ll be able to “follow” particular Twitter users who write articles or are mentioned in them by hovering over their names on a page.

That sounds cool, and in a best-case scenario, it allows Twitter to turn publishers into distribution partners. That’s a good thing. But it’s not fundamental to Twitter’s future either.

Implementation of the deal, which will see Microsoft’s Bing powering Yahoo searches and Yahoo handling sales of search ads for both companies, is “expected to begin in the coming days.” The companies have set a goal of completing it in the U.S. by the end of 2010.

It is worth noting that while Yahoo (YHOO) is transitioning its algorithmic and paid search platforms to Microsoft (MSFT), the search user experience is still its responsibility. In other words, this deal is no quick panacea, and Yahoo must remain on point and innovating if it is to make the most of the alliance.

Anyway, approval of the deal in the U.S. and abroad was clearly a relief to both companies, and Yahoo CEO Carol Bartz and Microsoft CEO Steve Ballmer applauded it in dueling banjo remarks.

“This breakthrough search alliance means Yahoo! can focus even more on our own innovative search experience,” Bartz said. “Yahoo! gets to do what we do best: combine our science and technology with compelling content to build personally relevant online experiences for our users and customers.”

Ballmer was equally enthusiastic. “Although we are just at the beginning of this process, we have reached an exciting milestone,” he said. “I believe that together, Microsoft and Yahoo! will promote more choice, better value and greater innovation to our customers as well as to advertisers and publishers.”

Yahoo! and Microsoft to Implement Search Alliance
Completion of U.S., European Review Clears Way for Agreement to Move Forward

SUNNYVALE, Calif. & REDMOND, Wash., Feb 18, 2010 — Microsoft and Yahoo! announced today that they have received clearance for their search agreement, without restrictions, from both the U.S. Department of Justice and the European Commission, and will now turn their attention to beginning the process of implementing the deal.

Implementation of the deal is expected to begin in the coming days and will involve transitioning Yahoo!’s algorithmic and paid search platforms to Microsoft, with Yahoo! becoming the exclusive relationship sales force for both companies’ premium search advertisers globally. Once the transition is completed, the companies’ unified search marketplace will deliver improved innovation for consumers, better volume and efficiency for advertisers and better monetization opportunities for web publishers through a platform that contains a larger pool of search queries.

“This breakthrough search alliance means Yahoo! can focus even more on our own innovative search experience,” said Yahoo! Chief Executive Officer Carol Bartz. “Yahoo! gets to do what we do best: combine our science and technology with compelling content to build personally relevant online experiences for our users and customers.”

Microsoft CEO Steve Ballmer concurred with Bartz’s assessment. “Although we are just at the beginning of this process, we have reached an exciting milestone,” Ballmer said. “I believe that together, Microsoft and Yahoo! will promote more choice, better value and greater innovation to our customers as well as to advertisers and publishers.”

Consumer Search Experience

Under terms of the agreement, which was announced in late July 2009, Microsoft will provide Yahoo! with the same search result listings available through Bing, and Yahoo! will innovate around those listings by integrating rich Yahoo! content, enhanced listings with conveniently organized information about key topics, and tools to tailor the experience for Yahoo! users.

Yahoo! will focus on providing a compelling and innovative search experience that allows people to find and explore the things, people and sites that matter most to them. While Microsoft will provide the underlying platform, both companies will continue to create different, compelling and evolving experiences, competing for audience, engagement and clicks.

Transition Timeline

Yahoo! and Microsoft will work with advertisers, publishers and developers on a customized plan designed to make the transition as efficient and seamless as possible. Both companies will begin working closely with most partners well in advance of their planned transition to the Microsoft platform and will communicate important information to partners about the transition periodically via phone, email, webinars and a newly created website at www.searchalliance.com.

The companies will begin the transition of algorithmic search and have set a goal of completing that effort in at least the United States by the end of 2010. The companies also hope to make significant progress transitioning U.S. advertisers and publishers prior to the 2010 holiday season, but may wait until 2011 if they determine that the transition will be more effective after the holiday season. All global customers and partners are expected to be transitioned by early 2012.

Customer Relationships

Once the transition is in place, Yahoo! and Microsoft will each represent and provide customer support to different advertiser segments. Yahoo!’s sales team will exclusively represent and support high volume advertisers, SEO and SEM agencies, and resellers and their clients. Microsoft will represent and support self-service advertisers.

Regulatory Summary

Although the transaction previously was cleared by regulators in Australia, Brazil and Canada, the terms of the agreement required clearance by U.S. and European regulators before it could commence. Meanwhile, Microsoft and Yahoo! continue to work with regulators in Korea, Taiwan, and Japan to ensure that they have all relevant information necessary to evaluate the transaction before the deal commences in those specific jurisdictions.

It’s now very old news that the online ad market is going to get roughed up next year. But by how much? If you want, you can take a gander at this week’s prognostications from Interpublic (IPG), WPP and Publicis. But online ad sales people I talk to say there really isn’t much point in placing any bets on 2009 until the end of this month.

That’s because ad sales have basically stopped until the end of the holiday season, I’m told.

There are some exceptions: If you want, say, prime placement at Yahoo (YHOO) to promote your blockbuster over the July 4th weekend, you have to pay up now. And Google’s (GOOG) search ads aren’t purchased in advance, anyway. But in general, no one wants to commit money to the Web until they see how they did in December.

That may sound like common sense, but it’s a change from past years, and it’s a story I keep hearing. Latest example: A sales executive from a very, very large online publisher told me he has multiple seven- and eight-figure ad deals hammered out and ready to go. But buyers have walked away and are letting the deals sit for the rest of the month, until they assess their holiday sales.

My ad executive is an optimistic sort (obviously), so he figures they’ll sign the paperwork eventually. But he also assumes that said buyers will try to use this month’s data as a hammer to knock down prices by 10 percent or more. I’ll check back at the end of the month, and see how that optimism is holding up.

How quickly things change.

In the face of mounting criticism, the two companies have delayed the deal, which would allow Yahoo (YHOO) to run some search and text ads sold by Google (GOOG). And now they are said to be in talks with the Department of Justice about concessions that could prevent the antitrust lawsuit it’s preparing to block the deal. Among them, some throwaway assurances that Yahoo would continue to compete in search ads and a cap on the number of Google ads Yahoo could use.

In a letter to the U.S. Department of Justice, the ANA objected to the Google-Yahoo partnership, arguing that it “will likely diminish competition, increase concentration of market power, limit choices currently available and potentially raise prices to advertisers for high-quality, affordable search advertising.” An understandable concern, considering that Google (GOOG) and Yahoo (YHOO) combined sell more than 80 percent of U.S. search ads, and more than 70 percent of that business is Google’s alone.

But not particularly understandable to Google, which likes to portray the alliance as some sort of enhanced AdSense deal that will make advertising on Yahoo more effective and Yahoo itself a “stronger competitor.” Unfortunately for Google, the ANA doesn’t share that view. Said Robert Liodice, ANA president and CEO, “We believe that the overall impact of this deal is a negative for advertisers and the marketplace.” A harsh indictment and one difficult for Google or the DOJ to shrug off when its coming from a group of companies that spend over $100 billion annually in advertising.

Apparently, according to Yahoo, Microsoft is as clever and deceptive as the buff and gun-toting Angelina Jolie in the new film “Wanted.”

BoomTown will get to that later. But with Yahoo (YHOO) stock hovering close to $20 a share, Microsoft (MSFT) has certainly got to be thrilled that the sweetened search-ad deal it is currently preparing–including forking over about $10 billion for one-third of the company–is getting cheaper by the minute.

With Yahoo’s stock at a disturbing $20.96 right now–and headed lower, it seems–its market value is only $28.4 billion, a depressed number that has sent its investors into a tizzy.

As I wrote last week, it’s those investors who are pushing Yahoo’s board to consider accepting a new version of Microsoft’s search-ad proposal that it turned down in favor of one from Google (GOOG) recently.

Those same investors had urged Microsoft to make a sweeter offer, promising a more cooperative Yahoo, especially now that it faces an upcoming proxy fight with billionaire Carl Icahn at its Aug. 1 board meeting.

Microsoft has no interest in swallowing Yahoo whole–although the dropping price does make it kind of tasty.

But it has been working on a beefed-up search deal, with more revenue guarantees on search ads and a higher price for search assets it would buy outright.

The centerpiece of the offer, of course, would be a deal to buy about one-third of Yahoo from existing shareholders at a premium to where it is trading now.

In its previous search-ad offer, Microsoft had offered to buy 16% of Yahoo for $8 billion at $35 a share.

Many large investors, disillusioned with the leadership of CEO Jerry Yang, have warned him and the board that they will vote with Icahn unless Yahoo engages with Microsoft and fast.

If Yahoo does change its mind and strike a sweeping search-ad deal with Microsoft, though, it would have to pay Google a $250 million fee for killing the deal.

Still, Yahoo took the opportunity today to ding Microsoft once again about its botched takeover battle, in a regulatory filing related to the proxy fight.

In the document, it called the software giant “unresponsive and inconsistent,” and noted “the record casts doubt on whether Microsoft was ever committed to a whole company acquisition.”

(See Yahoo’s slide on the issue below–click to make it larger)

Ooooh, it almost sounds like Yahoo is saying Microsoft carefully planned this intricate scheme to get Yahoo into this prone and disastrous position.

It’s almost as complicated as the plot of the thriller “Wanted”–BoomTown recommendation: Two thumbs up!–in which an office drone played by James McAvoy is whipped into deadly-assassin shape by a leather-clad Angelina Jolie and also badly tricked by her.

Yahoo’s leadership only wishes they had Angelina to kick them around.

Unfortunately for shareholders everywhere, they seem to be doing a very good job of it all by themselves.

As an added plus, here’s the “Wanted” trailer:

Meanwhile, Yahoo and Google (GOOG) moved to complete a search-ad deal.

Dueling statements from Yahoo and Microsoft on the conclusion of their negotiations below. (Carl Icahn’s outraged letter on the whole matter presumably forthcoming…)

Yahoo Announces Microsoft Talks Have Concluded

Yahoo, a leading global Internet company, today announced that discussions with Microsoft regarding a potential transaction–whether for an acquisition of all of Yahoo or a partial acquisition–have concluded. The conclusion of discussions follows numerous meetings and conversations with Microsoft regarding a number of transaction alternatives, including a meeting between Yahoo and Microsoft on June 8 in which Chairman Roy Bostock and other independent board members from Yahoo participated. At that meeting, Microsoft representatives stated unequivocally that Microsoft is not interested in pursuing an acquisition of all of Yahoo, even at the price range it had previously suggested.

With respect to an acquisition of Yahoo’s search business alone that Microsoft had proposed, Yahoo’s board of directors has determined, after careful evaluation, that such a transaction would not be consistent with the company’s view of the converging search and display marketplaces, would leave the company without an independent search business that it views as critical to its strategic future and would not be in the best interests of Yahoo stockholders.

Yahoo remains focused on maximizing value for stockholders by continuing to execute on its strategy of being the ‘starting point’ for the most consumers on the Internet and a ‘must buy’ for advertisers. The online-advertising industry is projected to grow from $40 billion in 2007 to approximately $75 billion in 2010, and the company believes it has the right assets, strategic plan, board of directors and management team to capitalize on this growth opportunity.”

Microsoft Issues Statement Regarding Yahoo

In the weeks since Microsoft withdrew its offer to acquire Yahoo, the two companies have continued to discuss an alternative transaction that Microsoft believes would have delivered in excess of $33 per share to the Yahoo shareholders. This partnership would ensure healthy competition in the marketplace, providing greater choice and innovation for advertisers, publishers and consumers.

As stated on May 3 and reiterated on May 18, Microsoft was not interested in rebidding for all of Yahoo. Our alternative transaction remains available for discussion.”