FACTBOX - Yahoo's search advertising deal with Google

(Reuters) - Yahoo Inc (YHOO.O) and larger rival Google Inc (GOOG.O) announced on Thursday a nonexclusive web search advertising partnership that is expected to generate as much as $800 million in annual revenue.

The agreement was disclosed just hours after Yahoo said it had failed to reach a deal with Microsoft Corp (MSFT.O), which had sought to buy Yahoo's search business in an alternative agreement. Click on nN12478638 for story.

Here are some details on the Yahoo-Google agreement:

* Yahoo will run ads supplied by Google's AdSense technology alongside Yahoo's search results and on some of Yahoo's websites in the United States and Canada.

* Yahoo expects the deal to generate $250 million to $450 million in incremental operating cash flow in the first 12 months, and sees an annual revenue opportunity of $800 million.

* The four-year agreement can be renewed twice for three years each time, so the maximum term is 10 years.

* The nonexclusive deal lets Yahoo display paid search results from its own ad technology known as Panama, as well as from other third parties.

* Yahoo will select the search terms and the web pages that will offer Google paid search results. Yahoo will also determine the number and placement of these results, and the mix of results provided by Panama, Google or other providers.

* Advertisers will pay Google directly for each click on its paid search results. Google will share a percentage of such revenue with Yahoo.