According to Reuters, Yahoo Japan is going to use Google's search technology rather than follow Yahoo Inc who chose to partner with Microsoft for search. Currently Yahoo Japan, the country's largest portal operator uses Yahoo Inc's search technology. Google will control almost all of the search traffic in Japan after the partnership.
Along with search Yahoo Japan will also adopt Google's advertising delivery system and feed its data to Google sites. The deal will severely underscore Microsoft's position in the search market in Japan and possibly other locations as word spreads. "If this Yahoo Japan and Google partnership works well, other search engine and portal site players all over the world may start adopting Google's technology," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.
Masahiro Inoue, Yahoo Japan President, said that after a thorough investigation they found that Microsoft's search technology was not properly suited for its needs. One of the reasons cited was the sub-par Japanese language search capabilities.
Yahoo Inc owns one-third of Yahoo Japan and though Yahoo Inc made a deal with Microsoft for search they will support Yahoo Japan in their decision to use Google. Yahoo Japan also stated their partnership with Google will not violate any anti-trust regulations in Japan. Yahoo Inc tried to partner with Google for search before they went with Microsoft but the deal was blocked by the US government.
Microsoft was not happy about the announcement by Yahoo Japan to choose Google. They issued a statement saying, "This agreement is even more anti-competitive than Google's deal with Yahoo in the United States and Canada that the Department of Justice found to be illegal. (The) deal would have locked up 90 percent of paid search advertising. This deal gives Google virtually 100 percent of all searches in Japan, both paid and unpaid. It means there will be no search competition in Japan and that Google will end up controlling all personal search information for all Japanese consumers and businesses."