and Microsoft Partner On New Search Engine Called Etao

Posted Oct 18, 2010 Limited (HKG:1688) and Microsoft Corporation (NASDAQ:MSFT) have partnered with each other to create a new website called Etao. Yahoo! Inc. (NASDAQ:YHOO) owns about 40% of Etao has the potential to be a major competitor to Baidu Inc. in China. Etao would also drive traffic to Alibaba’s retail website

Search results that would appear on Etao would be in the form of images and product prices. Results after that would be related to online forums. And lastly informational websites would appear from Microsoft’s Bing search engine. Etao is currently in beta testing.

Yahoo!’s ownership in has caused a bit of tension between the two companies because expressed interest in buying back their equity. Yahoo! refused and the talks ended recently. Yahoo! is also in the midst of ceasing the development of their own search engine and will adopt Microsoft Bing into their operations instead.

[Wall Street Journal]