Yahoo! and Microsoft have formed an alliance in an attempt to lure internet users away from Google.
The ten-year deal, which was confirmed on Wednesday, will allow Microsoft to use its search engine Bing on it partner's website.
This will give the company founded by Bill Gates access to the second biggest search audience on the internet, allowing it better to compete with Google.
Merger: Yahoo and Microsoft have sealed an internet search deal
In return, Yahoo!, which will retain its distinct identity but feature the phrase 'Powered by Bing' on its page, will run the advertising sales team for both online services.
It has been struggling to make profits and has fought off several takeover bids from Microsoft, including a £29billion offer.
will also have the right to sell adverts on some of Microsoft's sites.
Deal: Carol Bartz (left), chief executive of Yahoo, and Steve Ballmer, her counterpart at Microsoft, are hoping the search merger will rival Google
Microsoft wants more search requests because they have become critical for selling adverts.
Despite investing billions, the company remains a distant third in market share. Google boasts about 70 per cent of all searches.
Microsoft chief executive Steve Ballmer said the deal would give Bing the necessary clout to compete. He said: 'Through this agreement with Yahoo! we will create more innovation in search, better value for advertisers, and real consumer choice in a market currently dominated by a single company.'
The deal could also see Yahoo use Microsoft's Bing search engine
In recent weeks, commentators have pointed to a war brewing between Microsoft and Google after the latter announced it was developing a new operating system for laptop computers.
The move was seen as a strong challenge to Microsoft's dominance in that sector.
A Google spokesman said: 'There has traditionally been a lot of competition online, and our experience is that competition brings about great things for users.'
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