Yahoo Japan, Japan's largest Internet portal site, appears set to adopt Google's search engine instead of teaming up with Microsoft like partner Yahoo Inc, media reported.
Yahoo Japan, which currently uses Yahoo Inc's search technology, and Google together would control the bulk of Japan's search market.
Technology blog All Things Digital, owned by Dow Jones newswires, said Google seemed to be zeroing in on a deal with Yahoo Japan while the Nikkei business daily also said Yahoo Japan would probably make the switch.
The deal could be part of an larger alliance around mobile and other products, All Things Digital said, adding that an announcement may come when Yahoo Japan releases quarterly earnings at 3:10 p.m. (0610 GMT) on Tuesday.
Yahoo Japan spokesman Toru Nagano said the firm is considering switching its search engine but declined further comment.
Yahoo Inc signed a 10-year deal with Microsoft in July 2009 to save hundreds of millions of dollars a year in expenses by shifting Web indexing chores to Microsoft while Yahoo focuses on improving searching.
Yahoo executives have said the company expects to complete integration of its search technology with Microsoft in all 59 countries in which it operates by the second quarter of 2012.
Yahoo Inc owns a little over a third of Yahoo Japan and is its second-biggest shareholder after Softbank Corp.
Yahoo Inc sought an alliance with Google before it teamed up with Microsoft, but gave up on the plan due to opposition from the U.S. government.
Yahoo Japan shares gained 1.4 percent to 35,250 yen while the broader market was flat.
(Reporting by Nobuhiro Kubo; Editing by Edwina Gibbs)