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The long-sought deal is reportedly near for Yahoo Inc. and Microsoft Corp. to collaborate on Internet search technology and advertising.

Bloomberg and the Wall Street Journal's All Things D blog quoted unnamed sources who said an agreement could be announced as early as next week.

A large group of Microsoft executives, including search head Satya Nadella and top digital exec Qi Lu, a former Yahoo exec, are in Silicon Valley to complete the deal, All Things D reported.

It's not clear if they have brought the "boatloads of money" that Yahoo chief executive officer Carol Bartz said in May that she would seek in any deal with her company's long-time suitor.

All Things D reported that a deal is likely to involve Microsoft (Nasdaq: MSFT) paying several billion dollars upfront to take over its search and advertising business, as well as guaranteeing future payments to Yahoo (Nasdaq: YHOO).

Microsoft CEO Steve Ballmer has frequently said his company is interested in doing a search deal with Yahoo, and Bartz confirmed in May that talks were underway.

The latest news is viewed with caution, however, since the companies have come close to a deal before, only to be derailed by snags late in the process. Microsoft tried unsuccessfully to take over Yahoo with a $47.5 billion offer last year.

Microsoft ranks third in the U.S. search market behind No. 1 Google Inc.'s (Nasdaq: GOOG) 65 percent share, according to ComScore rankings for May. The software giant's share rose to 8.4 percent from 8 percent after coming out with its new Bing search engine while Yahoo, the second-ranked search engine, dropped to 19.6 percent from 20 percent.