WASHINGTON, US - Australian and Canadian competition authorities have approved the Internet search and advertising partnership between Yahoo! and Microsoft, the companies said Tuesday.

"Microsoft and Yahoo! have been notified that Australian and Canadian authorities have separately concluded their reviews and have no objections to our proposed search agreement," they said in a joint statement.

"We continue to believe that this deal will create a true, competitive alternative in the marketplace that will benefit consumers, advertisers and publishers," Yahoo! and Microsoft said.

"We remain hopeful that the agreement will close in early 2010," they added.

The agreement remains subject to review by US anti-trust regulators.

Yahoo! and Microsoft had originally planned to finalize the agreement by October 27 but have mutually agreed to extend their negotiations beyond the original date.

The 10-year Web search and advertising partnership unveiled in July sets the stage for a joint Yahoo!-Microsoft offensive against Internet titan Google, the leader in the lucrative search and advertising market.

Under the no-cash deal, Yahoo! will use Microsoft's new Bing search engine on its own sites while Yahoo! will provide the exclusive global sales force for premium search advertisers.