Yahoo! is officially enters the Israel search engine market by forming a partnership with Walla, an Israeli Internet news portal, search engine and E-mail services provider. Under this partnership, Walla will now use Yahoo! online database including searches in Hebrew, English and other languages in providing search results for its Israeli users. On the other hand, Walla also upgraded its new search engine at a cost of $1 million, on many fronts promises a new look with this new partnership, reported by Globes Online. Regardless of the outcome, Yahoo! and Walla will thus become a strong contender in competing with Google and Microsoft in Israeli market and most important, they’ll definitely going after Google’s core advertising market there. The Israeli Internet advertising market is growing steadily over the past years, from $25 million in 2003 to estimated $90 million in 2007, a nearly 400% rise in four-year period.

Israel is an attractive place to set up R&D center, Google has set up their R&D centers in Tel Aviv and Haifa, while Microsoft’s R&D centers are in Tel Aviv and Herzliya. This year we’ll see Yahoo! joining the part there by looking an office space in Haifa as well. Nevertheless, the Yahoo! and Wall new joint search engine venture will based on Walla AdVantage advertising platform.