Australian and Canadian authorities have given the all clear to the proposed Microsoft and Yahoo! search deal.

Here’s what the Australian Competition and Consumer Commission had to say about the deal:

“Microsoft and Yahoo!’s share of online paid search advertising queries in Australia was limited, In combining search engine platforms, Microsoft and Yahoo! may have been able to achieve the necessary scale to provide effective and sustainable competition to Google, which had a very large share of online paid search advertising queries.”

Google holds a huge majority in Australia with over 87.79% of Australians using Google.com or Google.com.au. This dominance would have made it easier for Australian regulators to approve the partnership because Bing and Yahoo! hold such a minor market share individually.

While this marks a good milestone in the agreement, the biggest roadblock still lies ahead with European and American regulators. These are considered to be more competitive search markets, with anti-trust bodies likely to give Microsoft and Yahoo! a harder time.

In a joint statement, Yahoo/Microsoft said that they remain hopeful that an agreement will close in early 2010.

Still waiting for Bing inclusion? M-Boost will get you listed in 7 days.