They had hoped to finalize the deal in late October but needed more time to work out the details.
In a statement on Friday, the companies said they hope that the transaction will close in early 2010 and that they welcome the broad support the deal has gotten from key players in the advertising industry.
“Microsoft and Yahoo believe that this deal will create a sustainable and more compelling alternative in search that can provide consumers, advertisers and publishers real choice, better value, and more innovation,” the partners said.
In October, four ad executives and the president of the American Association of Advertising Agencies sent a letter to the U.S. Department of Justice in support of the agreement. The DOJ is still reviewing the deal for possible antitrust concerns.
The agreement was nearly a year-and-a-half in the making, during which time Yahoo rejected acquisition offers from Microsoft. The stated goal of the arrangement is to offer stronger search competition to Google, which has about 70 percent market share. Combined, Microsoft and Yahoo make up most of the rest.