"This is a great milestone for Bing and Yahoo and our customers, and 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," said Yahoo official.
Now Microsoft would empower Yahoo only in US and Canada as field requests made in English only.
The two search engines would eventually provide service together through out the world by 2012.
According to recently published data, Yahoo and Microsoft have a combined 28 per cent share of the US search market, while Google has a roughly 66 per cent share.
Yahoo will sell some ads initially and will use Microsoft's technology to display them.
The deal doesn't affect Yahoo Japan Corp, a separately run company that plans to rely on Google's search technology.
By leaning on Microsoft's Bing search engine, Yahoo plans to dramatically lower expenses and focus on other products as it tries to snap out of a fiscal shrink that has depressed its stock price.