Microsoft on Tuesday began handling all Yahoo! online searches in Canada and the United States as the technology firms combine forces to take on Google.

"This is a great milestone for Bing and Yahoo! and our customers," Microsoft online services division senior vice president Satya Nadella said in a blog post.

"We are happy to report the transition has gone smoothly and we feel great about the progress our search alliance has been making over the summer."

Searches at Yahoo! websites for pictures, video, and general Web content are being powered by Bing, which Microsoft launched in June of last year as a successor to Windows Live.

Yahoo! will control how results are presented and has vowed to give users relevant data customized to their tastes or interests.

"We are focused on creating rich, immersive experiences that foster serendipitous discovery for people across the Yahoo! network," said senior vice president of Yahoo! Search Product Shashi Seth.

Yahoo! and Microsoft unveiled a 10-year Web search and advertising partnership a year ago that set the stage for a joint offensive against Google.

Under the agreement, Yahoo! will use Microsoft's search engine on its own sites while providing the exclusive global sales force for premium advertisers.

The next step is for Yahoo! to shift to Microsoft adCenter platform for targeting ads served along with Internet query results.

"We continue to work hard on the migration to adCenter, and are optimistic about completing this phase later this fall," Nadella said.

"Our primary goal is to provide advertisers with a quality transition experience in 2010, while being mindful of the holiday season."

Bing is to eventually power Internet searches at Yahoo! websites worldwide, but no timeline has been given for the global transition to be completed.

Google continues to dominate the US Internet search market, handling 65.8 percent of queries in July, according to statistics from industry tracker comScore.

A chat forum below Seth's post at the Yahoo! blog held a mixture of congratulations and sadness at the fact the pioneering Internet search firm was letting Bing do the work when it came to finding information on the Web.

"This marks the end of the true Yahoo," a visitor going by the name "Siklov" commented in the forum.

"Yahoo is officially not a search company anymore. They have ceased to exist in the universe they created. May we pay our respects with a moment of silence."

Yahoo! executives maintain that the company is being shrewd by focusing on creative and insightful ways to present search results to users while letting Microsoft do the resource-intensive job of scouring the Internet for data.

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