Microsoft and Yahoo have announced plans to combine their search engine efforts in a bid to rival Google.

Yahoo and Microsoft have today (29 July) unveiled a new internet search engine partnership which hopes to rival market leader Google.

In an agreement that the companies hope will “improve web search experience for users and advertisers”, Microsoft will now power Yahoo’s search engine while Yahoo will take control of both firms’ online advertising sales teams.

The news comes after Microsoft announced disappointing fourth quarter results earlier this month. Yahoo has also been struggling in light of the economic downturn and internet Goliath Google’s stronghold of the industry.

Yahoo had previously rebuffed offers from Microsoft in an attempt to remain independent.

According Microsoft’s statement, the move will “accelerate the pace and breadth of innovation by combining both companies’ complementary strengths and search platforms into a market competitor with the scale to fuel sustained development in search and search advertising.”

Carol Bartz, Yahoo CEO, said: “This agreement comes with boatloads of value for Yahoo, our users, and the industry. And I believe it establishes the foundation for a new era of internet innovation and development.”

Microsoft CEO, Steve Ballmer, commented: “Through this agreement with Yahoo, we will create more innovation in search, better value for advertisers, and real consumer choice in a market currently dominated by a single company.”

Microsoft obtaining an exclusive 10 year licence to Yahoo’s core search technologies and the integration of Yahoo search information into Microsoft’s existing web search platforms are among the key terms of the agreement.

The full implementation of the partnership is expected to happen in 24 months time, following regulatory approval.