- Mike Shields, Mediaweek

The search partnership between Microsoft and Yahoo has cleared its last regulatory hurdle, as both the U.S. Department of Justice and the European Commission have given clearance for the arrangement to proceed.

The companies said today that they would begin the process of implementing the partnership immediately. Specifically, as per the deal struck last July, Yahoo’s search engine will employ Microsoft’s technology, while Yahoo will take over ad sales for both parties.

Microsoft is banking on the volume generated through Yahoo’s search traffic to improve the performance of its own search product -- the much-hyped Bing. Meanwhile, Yahoo sees the deal as an opportunity to focus on its core media and display ad sales business. However, Yahoo has said it would continue to innovate when it comes to the search experience for its users.

The two companies said they expect the transition to be completed in the U.S. by the end of this year. The hope is that most U.S. advertisers will have transitioned to the new system prior to the holiday shopping season, said officials.

See also:"Digital Special Report 2010"