Last March 17, Yellowpages.com announced a multiyear distribution deal with Microsoft. This month, Yellowpages.com’s local listings and advertisers will begin appearing across Microsoft properties, including, MSN Yellowpages, MSN Search, Live Search and Maps.

Financial terms of the transaction were not disclosed, according to a Kelsey Group report. Typically, however, these distribution deals involve a minimum guaranteed payment in exchange for traffic guarantees, Matt Booth of Kelsey wrote. The top payment on traffic referrals is usually capped. The Idearc deal, which this deal replaces, was rumored to be worth more than $20 million per year to Microsoft. We would therefore expect the AT&T deal to be within that range.

Booth also believes that the Yellowpages.com announcement is more bad news for Idearc, Microsofts current local provider. On top of the distribution loss, Idearc recently had a string of high-profile executive departures that include: two CEOs, the CFO, the chief legal officer and the president of the Internet group. The company also reported lower than expected earnings weighed down by heavy debt service. Finally, it also means that Idearc reps will face off against Yellowpages.com reps touting valuable logos in their sales kits.

The Microsoft deal means AT&T has now closed exclusive distribution agreements with all the major portals (AOL, Microsoft, and Yahoo!). The company also has a reseller agreement with Google.

Yellowpages.com CEO Charles Stubbs expects the MS deal to add an incremental 35 million monthly searches on top of 125 million currently reported. Stubbs was pleased that this deal brings the company even more reach across all 50 states.

What’s the point of specifically mentioning all 50 states? Yellowpages.com has been aggressively adding white space sales reps, Booth wrote. We estimate the company has added more than 1,000 Internet sales personnel over the past year. These reps predominately sell in locales where Idearc operates print and online. From AT&Ts perspective, this means that all sales are truly incremental dollars with little fear of print cannibalization.

Watch out for a more detailed analysis of the deal in the Kelsey Group Advisory.