Internet search firm Yahoo and software giantMicrosoft announced Wednesday a 10-year deal in search and advertisingoperations in a bid to challenge the online dominance of Google.

Under the terms of the agreement, Yahoowill use Microsoft's new search engine on its sites and handle some advertisingsales for Microsoft.

At the same time, the agreement would give a boost to Microsoft's revampedsearch engine, which has been renamed Bing, on which the company's hopes forchallenging Google's dominance are pinned.

Since its launch a few weeks ago, Bing has been widely praised as a worthycompetitor to Google. "This agreement comes with boatloads of value forYahoo, our users, and the industry, and I believe it establishes the foundationfor a new era of internet innovation and development," Yahoo ChiefExecutive Officer Carol Bartz was quoted as saying by the Wall Street Journal.

Google controls some 65 percent of the US internet search market, with Yahooranked a distant second with 19.6 percent and Microsoft third with 8.4 percent.Combined, the latter two would hold a 28 percent share of the market.

Microsoft almost bought Yahoo for $47.5 billion last year, but the move wasscuttled 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,Bartz, confirmed in May that the two companies were holding talks on searchcollaboration. The 10-year agreementcalls for Microsoft to license Yahoo's search technologies, with Yahooinitially receiving a whopping 88 percent of search-generated ad revenue.

"Through this agreement with Yahoo, we will create more innovation insearch, better value for advertisers and real consumer choice in a marketcurrently dominated by a single company," said Microsoft chief executiveSteven A. Ballmer.