Multiple sources close to the situation said that the online search and advertising deal between Microsoft and Yahoo has been struck and will be announced within the next 24 hours.

While it is not clear if the actual papers have been inked, sources said negotiations are complete.

It is likely to be the cause of much relief at both companies, since they have been trying–without success–to join together to mount a better offense in the sector against the dominant Google (GOOG).

According to sources, as had been previous reported by Advertising Age, there will be no upfront payment to Yahoo, with the focus on a revenue share between the two companies.

“After three years of trying, it looks like it finally stuck,” joked one person familiar with the situation.

And, in fact, Yahoo (YHOO) and Microsoft (MSFT) have been engaged in talks about a variety of partnerships over the years, as well as a hostile takeover struggle that soured their relationship badly.

But, under new Yahoo CEO Carol Bartz, the companies have re-engaged in recent months, discussing a deal to share search and online advertising technology.

A spokesman for Microsoft declined to comment; Yahoo has not yet returned a call and email requesting comment.

More to come…obviously!

So, surprise surprise, Apple has rejected Google’s official Google Voice app, and has removed from the App Store several Google Voice-related apps that had previously been accepted. Jason Kincaid at TechCrunch, echoing many other critics of the decision, blames AT&T:

Of course, it’s not hard to guess who’s behind the restriction:
our old friend AT&T. Google Voice scares the carriers. It allows
users to send free SMS messages and get cheap long-distance over
Google Voice’s lines. It also makes it trivial to switch to a new
phone service, because everyone calls the Google Voice number
anyway.

[Update 1:40 pm: Well, so much for my speculation. A reliable little birdie has informed me that it was indeed AT&T that objected to Google Voice apps for the iPhone. It’s that simple.]

But does anyone really think AT&T pulls the strings in this relationship? Google Voice doesn’t just interfere with the carrier’s business model, it interferes with Apple’s iPhone business model. Not just AT&T but all iPhone carrier partners pay Apple a hefty subsidy for every iPhone sold, and that subsidy is based on assumptions about how much the average iPhone customer is going to pay in monthly service charges for voice, data, and SMS.

I can see why people are pissed that Apple has come out against Google Voice for iPhone, but I can’t see how anyone is surprised.

And, to play devil’s advocate for a moment, I’m not sure the decision is entirely unreasonable. Don’t think about it in terms of Apple’s relationship with its carrier partners, but instead think about it in terms of Apple’s competition with Google. Google Voice is a mobile phone service provided by the maker of one of the biggest competitors to the iPhone OS. What if Google Voice were instead Microsoft Voice? And what if Windows Mobile were as modern and competitive as Android? Would you be as surprised then that Apple is discouraging iPhone owners from using the service? Just saying.

Hungama and telco BSNL Ltd today announced a formal launch of their digital entertainment store exclusively available for BSNL broadband subscribers that number some four million. The service, which is locked to allow access only to BSNL subscribers, lets users download unlimited music and videos for less than the price of a regular music CD—Rs149. Currently, there are some 65,000 songs and 2,000 music videos. Access to unlimited game downloads will set you back by another Rs49 a month.

Files that are downloaded under this service tracks the status of subscription and cannot be used once the user doesn’t renew his subscription. So in essence, users are renting unlimited content at a fee.

We spoke to Sidhartha Roy, COO at Hungama, and he said the idea came from the fact that an affordable price point had to be offered because the biggest fight was against piracy. “To fight piracy, we need to offer better value, and better experience. And we hope that’s what we are doing with this initiative.”

The service was softlaunched a few months ago, but Roy declined to share any numbers. “But the entire top brass of BSNL, including the chairman, was present at the launch of what is essentially a value added service, says something about how seriously they are taking this.”

When asked about how the revenue share was structured between the telco and the content owners, he said: “Let me just say that it is extremely positive for the content partners. From a government telco, we have a much better deal compared with private telcos.” 

Facebook is being more social in terms of partnerships in India, than competitor Orkut.
MediaNama has learned from reliable sources that Facebook is expading its mobile base in India by taking a carrier-agnostic route by partnering with text messaging based community SMS Gupshup, a company funded by Helion Ventures and Charles River Ventures. When contacted, SMS [...]

More at MediaNama.com

This is a season for redesigns: the much talked about Yahoo homepage redesign has gone live in India, via an opt-in beta. It’s clear that the company has one key objective: to keep users on the Yahoo homepage, or at least, within the Yahoo ecosystem. As CEO Carol Bartz had said yesterday in the earnings [...]

More at MediaNama.com

The chip giant is grasping for straws with its ”human rights” appeal against Europe’s $1.5B fine.

Yahoo plans on announcing Thursday that it has bought Xoopit for a price in the $20 million range, according to several sources, one of its first acquisitions in a long while.

Reached late this afternoon by BoomTown, a Yahoo (YHOO) spokeswoman declined to comment about the acquisition. Xoopit did not respond to emails earlier today.

But sources said it was a done deal to buy the San Francisco-based social email start-up that finds photos, video, links and other files in email so that users can surface and then share them on many sites. It also has other products that essentially enliven email.

Xoopit’s investors–Accel Partners and Foundation Capital, along with several angel investors–have pumped about $6.5 million into the company since 2006.

According to sources, Yahoo was first impressed with its innovative plug-in that works with Gmail from Google (GOOG), and has been looking at the company for a while, previously offering about $10 million for it.

Xoopit also makes a similar photo-sharing application for Yahoo! Mail, which it launched late last year.

The opening up of its popular email product to a variety of third-party applications, in order to make it more robust, has been a goal of Yahoo recently, as it seeks to socialize one of its most popular products.

One source said Xoopit was a good fit for Yahoo because it allowed the company’s email to be the platform that could knit together other social networking services, such as Facebook. This is seen as a core feature, although the Silicon Valley-based company is also opening its email products up to outside developers.

Yahoo has been planning on announcing the acquisition on Thursday at Fortune magazine’s Brainstorm Tech conference, where SVP of Applications Products Bryan Lamkin is appearing on a panel titled, “Dollars & Demographics: Capitalizing on Demographic Trends.”

Lamkin, a former Adobe Systems (ADBE) exec, now runs the Yahoo unit that includes email and other communications and communities products. He was hired in April by CEO Carol Bartz.

That panel topic is a little ironic, several sources joked, since Xoopit is not profitable and has very small revenues thus far.

The Wall Street Journal also reported on the deal, although it said Yahoo and Xoopit were still in late-stage talks and the deal was not complete yet.

But, according to my sources, it is done.

The location-sharing application is not allowed to be a native app for the iPhone and iPod Touch, a decision that has raised some eyebrows.

Microsoft representative confirms retail plans posted on Gizmodo are genuine, but says they are early plans shared with creative agencies and that no decisions have been made.

KaZaA is back… but only in name. The former illegal music P2P paradise has relaunched as a legit subscription music service that offers unlimited streams and downloads for a flat monthly fee. For $19.98 per month, music listeners in the US can grab as many tracks as they want from major and independent artists. But as usual, the new KaZaA offers nothing unique over the plethora of other music services online, and its limitations will keep it from ever becoming popular.

KaZaA as a P2P service has been dead for a number of years now after the music and movie industries tried to sue KaZaA’s parent company into oblivion. Sharman Networks ended up settling the lawsuits with a number of music publishers, MPAA, RIAA, and IFPI, but not before shelling out something in the neighborhood of $150 million and closing operations.