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Microsoft and Yahoo! today announced their web search deal has cleared both EU and US competition hurdles, despite complaints from Google.

The pair said they will now get to work implementing the 10-year deal, which was announced last July and will see Redmond's Bing power searches across the Yahoo! web empire.

Today's announcement means the US Department of Justice and the European Commission are happy with the terms, which Microsoft hopes will give a big boost to its pursuit of Google. Yahoo! - which plans to focus on its display advertising and content business - expects to make $500m annually for its end of the deal.

The heavy engineering work of ripping out Yahoo!'s search algorithms and replacing them with Bing is scheduled to be complete, at least in the US, by the end of the year. The accompanying switch to Microsoft's back end marketplace for ad buyer might be delayed until early 2011, the companies said.

Google, which owns about 70 per cent of the search advertising market, has publicly claimed that the tie-up will harm competition. ®

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