In a Tuesday statement, Yahoo said that the Australian Competition and Consumer Commission (ACCC) and the Canadian Competition Bureau have given the first green signal to the company's search deal with Microsoft.

The statement by the Sunnyvale, California-based company said: "Microsoft and Yahoo have been notified that Australian and Canadian authorities have separately concluded their reviews and have no objections to our proposed search agreement."

Yahoo further added that though the proposed Yahoo-Microsoft agreement - a prospective challenge to the dominance of Internet search leader Google - is still under review in other jurisdictions, it is optimistic that the deal will receive the necessary approvals and will materialize early next year.

The Yahoo-Microsoft deal, whereby Microsoft will get an exclusive license to power Yahoo's search engine for a decade, will reportedly cut down the expenditure of the two companies by nearly US$200 million; as well as boost the yearly cash flow by almost $275 million.

About having given the approval to the Yahoo-Microsoft pact, the ACCC specified that the agreement would combine the search technology of the two tech biggies without hurting competition in the local market, where Google is the undisputed Internet search leader.

The ACCC report further said that the tie-up of the two search engine platforms will allow Yahoo and Microsoft to achieve the requisite operational 'scale' to provide effective and sustainable competition to Google.