Microsoft and Yahoo are getting closer getting their search outsourcing deal approved, according to a report.

The European Commission is set to approve the deal between Microsoft and Yahoo to install Microsoft as the exclusive provider of search technology on Yahoo's network of sites, according to Reuters.

The deal will still need to receive regulatory approval in the U.S., where the combined share of Yahoo and Microsoft would be about 28 percent according to ComScore.

Microsoft and Yahoo have said they hope to receive final approval for the deal by early 2010, which means that it may be done by thefirst quarter.