Yahoo has inked a search deal with Google, effectively ceding a large portion of its search business to its rival.

Bloomberg broke the news late Thursday.

The deal materialized as similar talks between Yahoo and Microsoft broke down earlier in the day. Word of the failed Microsoft/Yahoo talks came from a Yahoo statement.
 
Talks between Microsoft and Yahoo had begun shortly after the end of the Microhoo saga. That debacle prompted activist investor Carl Icahn to launch a proxy fight for control of Yahoo. But Icahn's battle for Yahoo will likely have a new wrinkle in the form of Google. Icahn had hoped to revive Microsoft's interest in Yahoo, but now those plans appear uncertain.

Google and Yahoo will delay the start of the deal because of antitrust concerns raised by U.S. regulators.  

The new permanent deal is expected to generate about $800 million of yearly revenue for Yahoo.