Washington, July 30 - Microsoft and Yahoo's blockbuster deal to form a 10-year partnership in Internet search and advertising is expected to face tough scrutiny with US authorities taking a hard look at consolidation in the hi-tech industry.

Already, Congress has shown interest in the deal with Democrat Senator Herb Kohl, chairman of the Senate Judiciary Committee's antitrust subcommittee, saying the partnership 'warrants our careful scrutiny'.

In a statement, Kohl said members of the subcommittee are 'concerned about competition issues in these markets because of the potentially far-reaching consequences for consumers and advertisers'.

Microsoft and Yahoo said they will submit their proposal for review by antitrust regulators and that they hope to gain approval by early 2010, arguing that competition concerns should be diminished from those about the merger attempted last year.

'The difference here is that this transaction is about paid search and algorithmic search,' said Brad Smith, Microsoft's general counsel, was quoted as saying by the Washington Post.

'The companies will continue to compete aggressively in other things such as portals, e-mail, instant messaging and display advertising.'

The two companies also say it was the only way to form a credible competitor to the industry's Goliath, Google, which holds 65 percent of the market for Internet search advertising.

'We actually think this is one of those cases where us coming together will provide more competition to the market leader, not less,' Microsoft chief executive Steve Ballmer said in a conference call.