Yahoo is planning to integrate Twitter into all its sites, meaning users can read and write Tweets without having to leave the portal.
The move is designed to use the popularity of the micro-blogging site to increase Yahoo's appeal to users. Yahoo already has a similar deal in place with Facebook, positioning itself to be a hub for social networking.
Bryan Lamkin, Senior Vice President, consumer products group, Yahoo, explained: "Let me try to capture the enormity of this integration in 140 characters or less: We're turning the key to the online social universe - you will find the most personally relevant experiences through Yahoo.
"We're also simplifying people's lives by bringing their social worlds - and the world - together for easy access."
As of yesterday, Yahoo's search engine began displaying Tweets in real time – much like Google and Microsoft, which signed similar agreements last year.
Live tweets will begin appearing on other Yahoo properties later this year.
According to Yahoo, "this will drive deeper user engagement, and create new and compelling opportunities for developers, advertisers, and publishers."
No money mentioned
Neither Yahoo nor Twitter would go into any details about how much has been spent on the deal. However, it's rumoured that together Google and Microsoft paid $25 million for Twitter rights.
A study last month by analytics firm Compete showed Facebook overtaking Yahoo as the second most visited site in the US, so Yahoo is looking to make up ground.
Twitter co-founder Biz Stone was understandably bullish on the agreement. He said: "The information in one single tweet can travel light-years farther with this Yahoo Integration. Tweets in more places brings relevance where and when you need it most."