Washington, July 29 - Tech giants Microsoft and Yahoo reached a long-awaited partnership Wednesday in a bid to challenge Google, which holds a 65 percent market share in online search.

Under a 10-year deal, websites from both companies would use Microsoft's Bing search engine, which could now integrate Yahoo's considerable trove of search technology.

Yahoo, in turn, would handle worldwide sales of premium search-related advertising for both companies.

In exchange for becoming Yahoo's sole search provider - and gaining access to its massive traffic - Microsoft would pay its partner 88 percent of the search revenues generated on Yahoo sites.

'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,' said Yahoo chief executive Carol Bartz in a statement.

According to Microsoft chief executive Steve Ballmer, the deal will allow Microsoft to 'create more innovation in search, better value for advertisers and real consumer choice in a market currently dominated by a single company'.