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Microsoft and Yahoo will announce a search and advertising partnership on Wednesday, capping months of negotiations aimed at challenging the Internet dominance of Google.
The paper's blog AllThingsD said that under the terms of the deal, Yahoo will use Microsoft's new search engine on its sites, while Yahoo would handle some advertising sales for Microsoft. The two companies will share search-related advertising revenue. Neither company would comment on the reports.
Google controls some 65% of the US Internet search market, with Yahoo ranked a distant second with 19.6% and Microsoft third with 8.4 percent.
Microsoft almost bought Yahoo for $47.5 billion last year, but the move was scuttled at the last minute by Yahoo co-founder and chief executive Jerry Yang, who later resigned following widespread criticism.
Microsoft has since refused to revive the buyout offer, but Yang's successor, Carol Bartz, confirmed in May that the two companies were holding talks on search collaboration.
The agreement would come just weeks after Microsoft launched its new search engine, Bing, which has been widely praised as a worthy competitor to Google.
