New York, July 29 (DPA) Internet search firm Yahoo and software giant Microsoft announced Wednesday a 10-year deal in search and advertising operations in a bid to challenge the online dominance of Google.

Under the terms of the agreement, Yahoo will use Microsoft's new search engine on its sites and handle some advertising sales for Microsoft.

The two companies - Yahoo in Sunnyvale, California and Microsoft in Redmond, Washington - said in joint announcement that Microsoft would provide the underlying search technology on Yahoo's popular Web sites.

At the same time, the agreement would give a boost to Microsoft's revamped search engine, which has been renamed Bing, on which the company's hopes for challenging Google's dominance are pinned.

Since its launch a few weeks ago, Bing has been widely praised as a worthy competitor to Google.

'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,' Yahoo Chief Executive Officer Carol Bartz was quoted as saying by the Wall Street Journal.