All it took was one week of testing Google’s AdSense for Search service, and Yahoo is one step closer to outsourcing its search advertising to Google, The Wall Street Journal reports, citing sources familiar with the matter.

Upon announcing the agreement with Google for the limited period of testing one week ago, Yahoo said that the collaboration doesn’t necessarily mean an extension of the agreement beyond the two weeks announced initially.

On one hand the positive results of the testing period may be enough for such a deal to take place, the same source reports. On the other hand, this would be Yahoo’s chance to increase the unsolicited bid from Microsoft. However, a possible Google-Yahoo partnership got many people raising antitrust concerns: “the regulators would just go nuclear,” Gartner analyst Van Baker told AFP last week.

Although many analysts predicted Yahoo had no other viable alternative to Microsoft, some now say that a Google – Yahoo partnership is possible. This would mean an increase in Yahoo’s cash flow of more than $1 billion a year, WSJ reports, quoting Citigroup Global Markets analyst Mark Mahaney.

At this point, Yahoo is exploring alternatives, just like they said they would in a letter sent to Microsoft on April 9, when they expressed their intention “to maximize stockholder value, including exploration of potential commercial business arrangements.”

Microsoft gave an ultimatum to Yahoo in a letter sent on April 5, stating that if the two companies will not begin negotiations on a definitive agreement within the next three weeks, they will take the case directly to the shareholders and start a proxy contest to elect a slate of director for the Yahoo Board.

“We continue to believe that your proposal is not in the best interests of Yahoo and our stockholders […] Furthermore, as a result of the decrease in our own stock price, the value of your proposal today is significantly lower than it was when you made your initial proposal,” Yahoo responded at the time.

Everyone is waiting for the April 22 first quarter earnings to see Yahoo’s reaction, as they are expected to raise the deal with Microsoft if the results are favorable.