Microsoft and Yahoo have joined hands to enter the search engine market together with the aim to pose a tough challenge to the current giant of the sector, Google. A development taking the companies closer to the target was announced on Friday, wherein the terms of a preliminary agreement, which was announced in July, were sealed.

Before Microsoft's Bing and Yahoo can actually start working together, the deal is subject to approval by Government regulators, a milestone which the companies are expecting will be achieved as early as next year.

Once the deal has received all approvals, Microsoft hopes to begin powering Yahoo's search engine services in US by the middle of next year.

Although the common aim is to try and outrace Google, both the firms involved have their individual motives as well, which they are hoping will be fulfilled via the deal. While Yahoo is hoping to cut costs with the arrangement, Microsoft is viewing it as an opportunity to increase the market share of its Bing search engine.

The partnership and its terms are currently being reviewed by the antitrust regulators at the U. S. Justice Department.