YAHOO! JAPAN HAS announced a new deal with Google, which will see the two companies dominate the Japanese market. It would leave Microsoft with a less than 5% search market hold.

Yahoo! Japan will switch from its current technology to Google’s search engine this year. It will also use Google’s online advertising and distribution system.

Google will have access to Yahoo! Japan’s data on online shopping and auction trends, but not personal information.

Last year, Yahoo! made a similar deal with Microsoft which aimed to compete with Google’s market hold. Yahoo! Inc only holds a 35% stake in the Japanese branch, leaving it free to make this agreement with Google.

Currently, Yahoo! Japan and Google cover about 94% of the country’s search market. Microsoft could seek to block the deal through Japan’s regulator, but Yahoo! Japan says it has already received government approval.

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