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Editor: Matt Paines

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Search engine buyout approved by regulators

Plans by software giant Microsoft's to buy Yahoo's internet search engine and search advertising businesses have been cleared by regulators on both sides of the Atlantic.

The European Commission ruled that the deal would not significantly impede effective competition.

Under the deal, Yahoo's website will use Microsoft's Bing search engine, with the two firms sharing revenues.

Microsoft is currently tying to increase its share of the search engine industry, which is dominated by Google.

Explaining its decision, the Commission said that together, Microsoft and Yahoo have less than 10% of the search engine market in Europe, compared with Google's 90% share.

In the US, the deal has been backed by the Department of Justice.

Microsoft chief executive Steve Ballmer is reported by the BBC as saying Microsoft and Yahoo will promote more choice, better value and greater innovation to customers, advertisers and publishers.

Meanwhile Carol Bartz, Chief executive of Yahoo, said the two firms would be creating a breakthrough search alliance.

The 10-year agreement will see Microsoft's Bing search engine power the Yahoo website, while Yahoo will in turn provide the main advertising sales team for Bing.

Microsoft will retain 12% of the search engine revenues generated via Yahoo's website for the first five years of the deal, while paying the remaining 88% to Yahoo.

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