Google’s top executives issued strong public backing on Thursday for a potential advertising partnership with Yahoo.

However, they stopped short of confirming that they were close to a deal that Microsoft has said was instrumental in the failure of its attempt to buy Yahoo.

“We’re very excited to work with [Yahoo],” said Sergey Brin, the Google co-founder. The two companies shared a culture and had worked together in the past, making a close relationship now easier, he said.

Mr Brin also backed the idea of Yahoo’s using a deal with Google to fend off Microsoft’s unsolicited takeover bid, which collapsed last weekend. “We believe in companies having choices about their destiny,” he said.

Yahoo and Google this month completed a two-week test in which Google suppliedsome advertisements served up to users of Yahoo’s search engine.

The greater effectiveness of Google’s search advertising system could greatly boost the money that Yahoo earns from search, adding as much as $1bn to its annual cashflow, according to Wall Street analysts.

“We view the test as successful,” said Eric Schmidt, chief executive officer. “That’s a good basis to talk to Yahoo some more.”

The possibility of a search advertising link between the two internet companies was highlighted by Steve Ballmer, chief executive officer of Microsoft, in a letter to Yahoo at the weekend in which he formally withdrew the software company’s takeover offer. A link would hurt Yahoo strategically and severely limit choice for advertisers, he said, hinting that Microsoft would lobby regulators heavily to block any deal.

Mr Schmidt refused to comment on the antitrust issues raised by the potential alliance, which would link the two biggest internet search companies, but he said that “if there were a deal, you would contemplate structuring it in a way to address the antitrust concerns that have been raised”.

Among other ideas, the two sides have discussed limiting the arrangement to a relatively small number of search terms where Google’s advertising system has the biggest advantage. Also, Mr Brin said that Google typically structured its advertising partnerships so that they weren’t long-term arrangements that “lock in” other companies, leaving them free to draw on other sources of advertising if they wish.

Google’s top executives, who were speaking ahead of the company’s annual shareholder meeting, also continued to warn that Microsoft’s monopoly position in desktop software continued to pose a competitive threat.”