An European Union Funded Competitor For Google (GOOG)

According to TechCrunch, the EU has decided to fund a new search engine business called Theseus. The German government is putting up an extraordinary $165 million.

The Associate Press writes that Theseus is “aiming to develop the world’s most advanced multimedia search engine for the next-generation Internet.” German heavyweights including Siemens (SI) and SAP (SAP) will help with research work.

France is considering kicking in another $112 million.

The EU is concerned about having fallen so far behind the US is information technology and internet innovation.

While the project may never challenge Google (GOOG), it could be troublesome for Microsoft (MSFT) and Yahoo! (YHOO) who are fighting to protect their share of the search business. If Theseus got even a small portion of global search activity it would have a profound impact on the long-term recovery efforts at Yahoo!.

But, it may be that the Europeans are only dreaming. They are late to the game.

Douglas A. McIntyre