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Less than two years ago, Yahoo was on a roll and had just signed a deal with computer manufacturer HP that would see its search engine as the default on all new HP computers.

Fast forward to 2008, and Yahoo’s on the ropes, with Microsoft providing the body blows. In particular, the news that Microsoft’s Live Search will now become the default search engine for HP computers and a Live Search enabled toolbar will come installed too.

Poor Yahoo.

From the press release:

“This agreement with HP is a strategic indicator of our increased focus on securing broad-scale distribution for Live Search,” said Kevin Johnson, president of the Platforms & Services Division at Microsoft. “This is the most significant distribution deal for Live Search that Microsoft has ever done, and we are very pleased to be partnering with HP to help bring Live Search to millions of consumers across North America.”

Microsoft is building a custom, Live Search-enabled toolbar for HP customers that takes advantage of the exceptional user experience capabilities of Microsoft Silverlight. The toolbar will provide HP with customization capabilities within the buttons on the toolbar, providing quick and easy access to a variety of online services and tools, such as Snapfish by HP, the company’s online photo service, and HP customer support.

“This agreement provides HP customers with an outstanding search product in Live Search, as well as a user-friendly, fully customizable way to access their favorite online services,” said Ulf Claesson, vice president of Worldwide Attach at HP. “Microsoft shares HP’s passion for delivering world-class technology to consumers in meaningful ways, and today’s announcement will help to provide an even more personal computing experience for HP customers.”

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