Going by the information forwarded by Microsoft spokesman Jack Evans on Wednesday, Microsoft and Yahoo have initiated informal discussions with the antitrust regulators of the European Union (EU), in connection with their proposed search and advertising deal.

Though the requisite paperwork for regulatory clearance of the proposed ten-year agreement has been filed by the companies in the US, the proceedings of the EU still remain unclear - it is not known whether the EU would proceed with a formal probe, and whether the deal would require the approval of the regulators of the organization.

According to Evans, the pertinent issue in Europe is "determining whether or not the deal requires formal notice before the European Commission and if not, do we need to file notice" in individual countries that may express the desire to evaluate the deal.

Meanwhile, the companies expect the antitrust review in the US to be more intense than in Europe - more so Microsoft-Yahoo together hold one-fifth of the US search market vis-à-vis Google's nearly 75 percent share.

Noting that Microsoft and Yahoo were aware that their agreement would "be closely reviewed in the US and EU," Evans, referring to the recently-commenced talks with the EU, said: "We have had informal discussions in Europe about the agreement just as we indicated we would when the deal was announced. We remain hopeful the deal will close in early 2010."