Google's Girth Boosts Yahoo!

Google's(GOOG Quote) growing roster of rivals may be boosting its closest competitor of all: Yahoo!(YHOO Quote).

On Tuesday, Yahoo! announced a new multiyear partnership with Viacom(VIA Quote). Under the terms of the arrangement, Yahoo! will power the sponsored and contextual searches for 33 of Viacom's online sites.

The deal is hardly an immediate windfall for Yahoo!. Annual revenue will come in at only about $24 million to begin with, Merrill Lynch analyst Justin Post estimated in a research note Tuesday. Merrill Lynch makes a market in Yahoo! shares.

Though shares of Yahoo! slipped 1.6% to $31.17 on Wednesday, the Sunnyvale, Calif., company has rallied roughly 25% since the beginning of the year. Investors await the company's first-quarter earnings announcement next week. Viacom dropped 1.4% to $40.08 Wednesday.

But a Viacom relationship is rife with potential. In a statement, the companies said that the deal has the possibility of expanding to another 140 Web sites Viacom operates across the globe. Over time, those numbers could start adding up.

While the party line made sure to plug Yahoo!'s recently launched Panama -- "Yahoo! has made impressive strides with its new search-marketing system," Viacom CEO Philippe Dauman said -- the move has as much to do with Google as with Yahoo!'s new technology.

Viacom is embroiled in a bitter high-profile battle with Google. At the same time, it needs to find a way to make more money from its Web presence. Almost by default, and even without Panama, this makes Yahoo! the go-to partner. And as Google encroaches on an increasing amount of turf, the pattern may play out across a number of different industries.