By now you have heard that Microsoft and Yahoo have entered into a partnership for their search functionality. People are obviously making a big deal about this, but it is not as big as it seems. First, Yahoo is still a separate company, and did not completely sell to Microsoft. An outright acquisition was what was originally talked about ages ago. Also, Yahoo did this before with Google when it was just a startup. Then there is the question of whether this really matters. Was the search battle already over?

Yahoo has had a decent percentage of the search market share, and the combination with Bing will create a larger competitor:

Bing will become Google’s main competitor in search, with a market share of about 28% in the US (comScore, June 2009) and about 11% worldwide (StatCounter).

However, when someone dominates a market like Google has, the battle is already over. The only way to truly dethrone them is to innovate in a different direction to make the original offering obsolete. Bing may be a better search engine, and having 28% of the domestic search traffic is nice, but that does not make a Google killer.

The other side of this is the beating that Yahoo is taking regarding their sell-off of the search business. People are under the impression that Yahoo is a search company. Yahoo has not been a search company since they had the Google deal several years ago. Now, Yahoo is more of a content company. They have one of the largest web email offerings and one of the most heavily trafficked news sites on the web. That is likely how Yahoo makes its money. This is yet another move to let Yahoo focus on the items that they do well and have a leading product. If they do all of this business restructuring correctly, they could become much stronger and much more focused.

Disappointingly, Yahoo was finally showing life with innovative search technology. Products like SearchMonkey and BOSS were very well received and looked like solid technologies to build upon. The Yahoo Developer Blog tries to answer some of these concerns, but fails:

For SearchMonkey and BOSS, we currently do not have anything concrete to tell you. Clearly, we’ll need to work with Microsoft to determine what makes the most sense for you and for us.

This may not bode well for those other companies that have built products on top of these technologies.

So, we no longer have to worry about Yahoo’s search business as they have finally found it a home. Now Yahoo can really get down to business.

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