According to inside sources, Microsoft and Yahoo! Inc. have finally come to the last threshold of signing an internet search deal that had the search market on its toes for some time now. The search deal stipulates that Microsoft and Yahoo! will share the revenues generated from the search advertisements. The terms and haven’t been finalized yet, but it is expected to be signed and come into effect latest by tomorrow.

In a recent ComScore evaluation, Microsoft’s newest search engine Bing has been lagging behind the search giant Google in terms of user preference and usage. On the other hand Yahoo! itself has been doing extremely poorly and had posted losses and a massive decline in sales in its financial statements for the last three quarters. The current CEO of Yahoo!. Carlo Bartz has expressed his hopes with the upcoming search deal with Microsoft and has stated that the ailing company might be able to generate upwards of $500 million, if the deal comes through. As of now, Google has been dominating the search market with an astounding 65% of the market share, whereas only 27% of the search market is being utilized by Yahoo! and Microsoft combined.

Microsoft has been expressing its desire to get into a search deal with Yahoo! Inc. since last year, after abandoning its $47.5 billion bid to take over Yahoo! entirely. As per the proposed deal, Microsoft’s Bing will be accepted as the default search engine on Yahoo! and with this step, both companies are expecting a boost of 30% in the search market share.

Via Bloomberg & AdAge.