Yahoo! European director of corporate comms David Sawday said the review would also affect US agency arrangements.
Sawday declined to comment on fees for the combined account, but the brief is thought to be worth in excess of £300,000.
Yahoo! said it had decided to 'align our international corporate and policy agency needs more closely between the US and Europe'.
C&W's accounts for trade PR and dating spin-off Yahoo! Personals are unaffected, as are those of a number of consumer shops used in the UK.
Yahoo! chairman and CEO Terry Semel said in January that the company would revamp its search engine advertising systems this year in a bid to close the gap on Google, which leads the market.