Microsoft Deal In Hand, Yahoo! Looks To Next Generation Of Search

Microsoft (MSFT) has talked about using its Bing search engine to search the Internet “real time” to pick up Twitter messages and other information and data that rockets across the web nanosecond by nanosecond.

In theory , mapping the web as it evolves may be nearly as valuable as indexing old pages which is what search engines have done for years.

Wall St. has assumed that Yahoo! (YHOO) would stop devoting resource to search technology now that it will use Bing for its search functions. Yahoo! is making clear that is not true, even as the ink on its deal with Microsoft is still in the process of drying.

According to Reuters, Yahoo’s Prabhakar Raghavan, head of Yahoo Labs, said that the company could potentially “mine” messages from Twitter, the popular microblogging service, to offer Web surfers search results beyond those offered by Microsoft’s Bing.

Yahoo! may have decided that it does not want to leave its entire fate in the search business to its ten-year alliance with Redmond. The portal company has to contend with the fact that market leader Google (GOOG) will continue to improve its product. It may even be able to increase its 65% market share in the US. Google still has the opportunity to add features to its core search features and those improvements could bring it even more customers.

Yahoo!’s concern now must be that even if it can bring new search features to market, they may not be ones that the market cares about.

There is no clear indication that consumers or businesses care about what goes on across the internet “real time.” Twitter messages, texting, figures that are transmitted from point-to-point without analysis may be so much “space junk” circling the world of the valuable data Google delivers with its basic product. Real time search may produce results so raw and disorganized that no one can use them.

Yahoo! may have some success delivering the next big thing in search engine results but it may not be anything people care about.

Douglas A. McIntyre