GOOGLE Inc and Yahoo! Inc, the most popular search engines, face a review from Canada's competition watchdog of their proposed advertising partnership.

"It's a sizeable agreement and we're going to take a close, hard look at it," Anthony Durocher, a senior officer with the Competition Bureau, said on Friday in an interview with Bloomberg News.

The firms, which also are trying to persuade United States regulators to grant the deal, want to start the partnership by October. Google told US law makers last month the deal will boost competition without raising its share of search traffic. Yahoo ranks a distant second to Google in Internet queries and search ads.

"The market dynamics are roughly the same" in Canada as in the US, said Kevin Restivo, an analyst with IDC in Toronto. So if the tie-up is approved in the US, there would be little reason for Canada to block it, he said.

Google had 61.9 percent of US Internet queries in July, topping Yahoo's 20.5 percent and Microsoft Corp's 8.9 percent, according to research firm ComScore Inc.