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The Register reports that the beta version of Microsoft Internet Explorer 7 blocks search toolbars, including the Google search toolbar. Quotes, reactions and analysis:


The Register says (excerpts):

Microsoft's Internet Explorer 7 went on a limited beta release today and contains a nasty surprise for some users. Users with search toolbars from Yahoo! and arch-rival Google have discovered that these vanish. Other third-party toolbars designed to block pop-ups or aid with form filling appear to be working normally, according to reports from Reg readers.

The default search engine is MSN Search.

There are sound compatibility reasons for Microsoft disabling third-party toolbars in an early cut of the software. The beta is only available to Vista beta testers, and is available either as part of Vista itself or as a download for Windows XP, and affects only a few thousand people.

Update:
We've received multiple corroborations of the problem. For others, everything is fine. Google Toolbar seems to bear the brunt. The most recent version of Yahoo!'s toolbar works, but older versions don't.

One gaffe: we reported that no other search engines are available. This isn't true. Microsoft rearranged the deckchairs so that alternatives including Google and Yahoo! can be made the default.

Robert Scoble responds:

I just talked with Dean Hachamovitch, the guy who runs the IE team, and he says that they tested with the Google and Yahoo toolbar and it was running on their machines (he just sent me screen captures of his personal machine running IE 7 with both the Google and Yahoo toolbar installed) and they in no way are trying to block the Google toolbar from working. He says that he commits to everyone to getting the toolbar to work and if there's something that isn't working the IE team wants to know about it so they can fix it.

and in a response to comments he adds:

I have not seen any toolbar problems on any of our machines.

Quick analysis:

  • I've written before that browser-embedded search (a la Firefox and Safari) is far more usable than search toolbars or visiting a search engine home page. It was therefore only a matter of time before Microsoft adopted browser-embedded search, and it's obvious that MSN Search will be the Microsoft default in-browser search option.
  • Browser-embedded search renders search toolbars obsolete (due to loss of screen real estate for functionality that's built into the browser anyway), so the furore over IE7's interoperability with search toolbars is largely academic.
  • The "browser-embedded search" risk to Google's search business has been consistently underestimated by investors who are more focused on the short-term growth of Google's PPC revenue than the structural determinants of search market share.
  • Don't expect Microsoft to exclude Google or Yahoo services as search options; it doesn't need to do that. If Microsoft makes MSN search the default search option (among an embedded list of search services) when the browser is downloaded (or preloaded), Microsoft will take massive market share. Why? Most users won't bother to switch their default search option.
  • Even if users do decide to examine their in-browser search options, Microsoft will remove much of Google's advantage simply by presenting a long list of search services and presenting Google as one option among many.

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Source: The Browser Wars begin: Microsoft targets Google? (MSFT, GOOG)