Yahoo Inc announced an expansion of its mobile Web portals to T-mobile, so its smart phone users who get data will have Yahoo search by default.
Yahoo started serving T-mobile, a unit of Germany's Deutsche Telekom AG, in 10 European countries this year, sharing ad search revenue.
Yahoo will reach 105 million U.S. subscribers between its deal with T-Mobile and one with AT&T.
The long-scheduled announcement came hours after Microsoft Chairman Steve Ballmer told an audience that, while he has no interest in reviving any attempts to purchase Yahoo, he is interested in a partnership pegged to searches.
Yahoo shares closed down nearly 21 percent on the remarks after gaining on hopes Microsoft would revive its bid after Yahoo Chief Executive Jerry Yang announced he would leave.