Going by an All Things Digital report, a likely search and advertising partnerships between Yahoo and Microsoft appears to be on the cards, with the CEOs of both companies - Yahoo's Carol Bartz and Microsoft's Steve Ballmer - reported to have directly discussed the prospects regarding the same.

Even though the recently-begun talks are reportedly not focused on a fresh takeover bid from Microsoft, the McGraw-Hill Media Summit held last month in New York, had Ballmer make a mention of Yahoo's search volume could actually boost's Microsoft's efforts pulling an increased market share away from Google.

According to information obtained from sources familiar with the proceedings, the talks between Bartz and Ballmer have focused on proposed measures by which the companies can group their advertising attempts, including the possibility of Microsoft selling search ads for Yahoo, and Yahoo, in return, selling display ads on Microsoft properties.

The Microsoft executives are fully aware that the Microsoft's comparatively-lesser audience and advertisers' base is a hindrance in competing with Google search engine; and that a Yahoo-Microsoft arrangement of grouping together users or advertisers would be of immense help in giving a much tougher competition to Google in search.

Towards that end, Microsoft has already pilfered Yahoo's top search talent, including Qi Lu, who last December took over as president of Microsoft's Online Services Group!