Microsoft Corp Chief Executive Steve Ballmer said on Thursday the company's search engine partnership with Yahoo would not be limited to the U.S. but would be introduced around the world, once it gets regulatory approval.

Earlier this year Microsoft and Yahoo signed a 10-year global Web search partnership to challenge Google Inc, a pact that U.S. and European antitrust regulators are evaluating.

"It's possible that we will extend that partnership (with Yahoo) outside the U.S.," Ballmer told reporters at a news conference. "We will have to wait and see if we can get approval and consummate that partnership inside the U.S. first."

The deal, struck in July, must be approved by regulators in the United States and Europe in order to go into effect.

As soon as those regulators give approval, the agreement goes into effect worldwide, although implementation in a specific country would be postponed if regulatory approval is required but not yet obtained. That should not postpone implementation in other places, a Microsoft spokesman said.

Microsoft believes the deal will close in early 2010, and that they can make significant progress on integration in one or two major markets next year.

(Reporting by Mayumi Negishi and Bill Rigby; Editing by Edwina Gibbs and Derek Caney)