Microsoft's Live Search to replace Yahoo! on Hewlett-Packard's PCs

Hewlett-Packard Corp. (NYSE: HPQ) has just dealt Yahoo Inc. (NASDAQ: YHOO) a huge blow at the worst possible time. The world's leading PC maker and largest seller in hot laptop PC category will be replacing Yahoo! with Microsoft Corp. (NASDAQ: MSFT)'s Live Search services starting next January.

It's been my experience that a majority of PC users use the default portal and search engine services that come installed on their PCs. Moving Yahoo! off the world's best-selling PC line won't do anything to help Yahoo! but will do everything to help Microsoft compete more head-on with Google, Inc. (NASDAQ: GOOG). That little web browser toolbar many of us use is billion-dollar real estate, and Yahoo!'s is about to be booted off in favor of Microsoft's.

Microsoft said that the upcoming search partnership with the world's largest seller of PCs would deliver "a very high" volume of search queries. This is just what Microsoft needs to more effectively compete in the internet search arena with Google, but it won't mean serious competition with the search leader either. Still, more search revenue for Microsoft will definitely be seen as a good thing. Meanwhile, Yahoo! will be pondering options on where its future rests, but we'll probably get a better idea before 2009 once the company has its annual shareholders' meeting some time in July.