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MICROSOFT-YAHOO TIMELINE

January 2008: Microsoft offers to buy Yahoo for $44.6bn in cash and shares, later raised to $47.5bn
May 2008: Microsoft walks away from the table after the two sides fail to agree on a price
June 2008: Yahoo strikes a deal to use Google’s technology, with Google ads appearing on some Yahoo search results
November 2008: Google abandons the Yahoo deal after objections from anti-trust regulators in the US
November 2008: Yahoo co-founder Jerry Yang stands down as the firm’s boss
April 2009: Yahoo says it will cut 5% of its workforce after quarterly profits drop sharply
May 2009: Microsoft relaunches its own search engine, now branded bing.com
July 2009: After new speculation, Microsoft and Yahoo finally announce a web search deal

The deal ends years of back-and-forth negotiations between the two companies.

Microsoft originally offered to buy Yahoo in January 2008 - with an offer worth about $47.5bn.

But Mr Ballmer later withdrew that bid after Yahoo’s then boss, Mr Yang, demanded a higher price.

Yahoo instead opting for an online advertising partnership with rival Google instead.

But that tie-up was later abandoned because of the risk of a protracted battle with regulators over competition issues.

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Google Chrome OS will be aimed initially at small, low-cost netbooks, but will eventually be used on PCs as well.

Google said netbooks with Chrome OS could be on sale by the middle of 2010.

“Speed, simplicity and security are the key aspects of Google Chrome OS,” the firm said in its official blog.

The operating system, which will run on an open source licence, was a “natural extension” of its Chrome browser, the firm said.

The news comes just months before Microsoft launches the latest version of its operating system, called Windows 7.

In a separate announcement Google also revealed that many of its most popular applications had finally moved out of trial, or beta, phase.

Gmail, for example, has worn the beta tag for five years.

“We realise this situation puzzles some people, particularly those who subscribe to the traditional definition of beta software as being not yet ready for prime time,” wrote Matthew Glotzbach, the director of product management in the official Google blog.

The decision to ditch the beta tag was taken because the apps had finally reached the “high bar” mark, he wrote.

More than 1.75 million companies use Google apps, according to the firm.