The blogosphere continues to buzz today as Web scribes ferociously debate the possibility that Yahoo!, weary of the search engine wars, has faced reality and is ceding the prized market to Google once and for all.


What set blogland alight was a report yesterday from Bloomberg News’ Jonathan Thaw, published at the Seattle Post-Intelligencer under the headline “Yahoo! gives up quest for search dominance”:


Yahoo! Inc., one of the first Internet search companies, has capitulated to Google Inc. in the battle for market dominance.


“We don’t think it’s reasonable to assume we’re going to gain a lot of share from Google,” Chief Financial Officer Susan Decker said in an interview. “It’s not our goal to be No. 1 in Internet search. We would be very happy to maintain our market share.”


Those shocking comments were enough to make more than a few bloggers gag over their keyboards.


“That’s it, I am no longer using Yahoo! Search,” wrote Steve Rubel at Micro Persuasion. “I have no interest in using a product that the company doesn’t aspire to make best of breed. If search is no longer hip to Yahoo!, then Yahoo! Search is no longer hip with me.”


Saying Yahoo! was “content to be Google’s footstool,” Andy Beal at Marketing Pilgrim wondered why Yahoo! would actually admit it was happy to be second-best. “What in the world? Why not just sign the deed to your market share and hand it directly to Google?” asked Beal. “If I were Microsoft or Ask Jeeves, I’d get someone in front of a reporter today and let them know that they are still in the race and are more than happy to help Yahoo! find its way to the bench.”


But another wave of bloggers wasn’t so quick to believe what they read — from either the Bloomberg reporter or their own brethren.


“My initial reaction was that this must be one of these quotes being taken out of a specific context, and the sensational aspect of the headline is leading everyone to pile in. To cut the commentary short: Bullshit. No way,” wrote Jeff Clavier, adding his wish “that we bloggers think about the implications and/or the likelihood of what is being reported before adding noise to the signal. Too much trigger happiness and not enough analysis in my opinion.”


Over at the Intuitive Life Business Blog, Dave Taylor said it was “no surprise that not only are industry analysts misinterpreting this quote, but so are lots of bloggers, too.” The problem, argued Taylor, is that Americans tend to think in terms of “Win or Die,” blinding themselves to “the best and smartest strategy of all. That’s the Ferrari Solution: don’t sell the most, sell the best.” “I do not see anything being conceded or Yahoo! giving up or being ‘Google’s footstool’ (for goodness sake!),” Taylor added, “but rather a company that is being smart and sharing that it has a very specific strategic direction and is traveling towards that, not blindly competing to be #1 in the search space by traffic.”


For their part, two Yahoo! Search executives responded to the “conjecture and confusion” rampant in blogland by passionately defending the company’s “commitment to being the best” search engine around: “As all of us at Yahoo! agree, we’re in it for the long haul, and we’re in it to win.”


But even though the two execs did not question (or even address) the accuracy of Decker’s comments, as usual a number of irritated bloggers blamed the news media for its coverage.


“[I]f you think Yahoo! is actually giving up on search based on one quote taken out of context, you’re actually being stupid,” said Lloyd Shepherd. “I have been losing respect for the reporter on the street more and more these days,” declared Jason Golod, who admitted that while he didn’t know what had happened exactly with Decker’s Bloomberg quote, he was certain that reporters “mis-report (read: make stuff up) facts and news very frequently.”


Yet Thaw’s original story has stood up thus far, as David A. Utter pointed out today at the search news publication WebProNews. “Bloomberg is a pretty solid and reliable news source. It’s difficult to imagine a scenario where one of its reporters would put together that statement out of context,” Utter noted, adding that “Decker has not denied making that statement, so it seems safe to take these comments at face value.”


Could be Golod and Shepherd were a little too quick with the trigger themselves.

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Edward B. Colby was a writer at CJR Daily.