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http://seattletimes.nwsource.com/html/businesstechnology/2004301567_yahoo24.html

"Long before the world learned that Google had turned the Internet into an amazing money-minting machine, Yahoo knew.

When Google was still a private company, it sent its financial statements to Yahoo's headquarters in Sunnyvale like clockwork. Google had to because Yahoo was one of its earliest investors.

The statements showed the incredible growth of Google's search advertising business, with sales more than doubling from quarter to quarter.

But Yahoo executives didn't focus on the money; they were interested in how much traffic was being driven by search, recalled Ellen Siminoff, an executive who joined Yahoo in 1996.

In 2000, Yahoo agreed to use and promote Google, which it touted as "the best search engine on the Internet." Google co-founder Larry Page described the pact as a "major milestone."

The following year, Yahoo was even more generous, paying Google $7.2 million for its services (Google in turn paid Yahoo $1.1 million for promotional help). Google desperately needed the money, which helped push it into the black for the entire year.

Yet Yahoo was hardly flush with cash. After two years of profit, Yahoo reported an annual loss of $93 million in 2001. The value of its stock had collapsed from $118.75 a share in January 2000 to $4.05 in September 2001.

Meanwhile, Yahoo's promotional push was having an effect on Google."

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