Surprise: Yahoo! Will Continue to Compete with Microsoft on Search Despite Alliance

At a product rollout event in Sunnyvale, California yesterday, Internet giant Yahoo! showed off new versions of three key products. But the biggest news the company generated was its pronouncement that it would continue to compete with Microsoft for search users, even after the two companies' search alliance was consummated.

Yahoo! held the event to demonstrate new capabilities in its popular web email, instant messaging, and Internet search products. But it was search that got the most attention by far, since Yahoo! was supposedly giving up on this market by allying with Microsoft.

That is not the case, Yahoo! proclaimed.

"We are not a version of Bing," Yahoo! Senior Vice President Prabhakar Raghavan said. "We are Yahoo! and that will continue. We collaborate \[with Microsoft\] on the back-end, but we are competitors on the front-end. We are going to have our own Yahoo! search experience."

According to the Internet giant, it is simply giving up on developing the back-end search technology, which the company is ceding to Microsoft. But it will still control the design of its search engine, as well as which features it exposes to users.

"We are committed to continuing to invest in search," Yahoo! Vice President Larry Cornett said. "This \[new\] design is going to transform the way you use the web, \[and\] make it easier and faster for you to find the things that matter most to you."

Yahoo! says that it will use the money its saving on back-end search R&D to improve the end-user experience dramatically. To this end, an upcoming update to Yahoo! search will integrate with Facebook, Twitter, Yelp, YouTube, and other popular online destinations and allow Bing-like filtering of results.

News that Yahoo! will continue to compete with Microsoft for search users should probably dull any calls for antitrust action to prevent a Microsoft/Yahoo! link-up. Recently, the companies acknowledged that the US Department of Justice was reviewing the alliance, and they have submitted the paperwork required under the antitrust-oriented Hart-Scott-Rodino Act.

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