Danny Sullivan put it well in his Yahoo & Google Together Again In New Search Deal. This month, Yahoo said they reached an agreement with Google to have Yahoo Search powered, in part, by Google search and Google ads.

You can read it in their investor report:

Didn’t we see signs of this in July? We did, Yahoo confirmed they were testing Google search results over Bing powered search results. In Danny’s article, he goes through many of the facts, what ifs and so on.

In the transcript of the earnings call, Marissa Mayer added:

And in the Q&A portion, here are more snippets:

Right now, Microsoft has to power 51% of the Yahoo Search desktop search results and ads. The mobile side, there is no such agreement. So I guess we will see how it plays out for them.

Forum discussion at WebmasterWorld.