Japan's top Internet portal Yahoo! Japan may create a search alliance with Google, in a deal that would dominate the Japanese market and be a possible blow to Microsoft, a report said on Tuesday.
The agreement between Yahoo! Japan, which is 40 per cent owned by telecoms operator Softbank, and the US search giant could be announced later Tuesday, Dow Jones Newswires said.
"We've been considering changing our search engine, and Google is one option," Yahoo! Japan spokesman Toru Nagano told AFP, adding that "nothing official" had been decided.
If Google and Yahoo! Japan do form an alliance; the pair would control almost the entire Japanese search market.
Yahoo! Japan currently has just over a 56 per cent share of the search market and Google has about 31 per cent, the report said. Microsoft has almost a three per cent share.
Yahoo! Japan is not directly affected by the Internet search partnership reached last year between Microsoft and Yahoo!, an alliance aimed at boosting competition with Google, which has two-thirds of the global market.
The independently run Japanese company is not obliged to use Microsoft's Bing technology, which will power Yahoo! in the United States by the end of the year and will also be used in other countries where Yahoo! operates, said the report.
If Yahoo! Japan and Google team up, Microsoft is likely to try to block the deal from gaining regulatory approval in Japan, Dow Jones Newswires said.