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In the world of online search, there's Google, and there's everyone else.

The undisputed Sultan of Search, a company whose name has become a verb, Google accounts for about 65% of all online searches in the U.S, according to comScore Inc. But Google's comfortable dominance may be in for its most serious challenge in years with the debut of Bing, Microsoft's new search engine. Launched in June with a marketing and advertising blitz that reportedly cost Microsoft $80 million, Bing has come out of the gate strong, adding two percentage points to Microsoft's 8.4% search share in its first week of operation.

That share will soon get a huge boost with this week's announcement of a search and advertising partnership between Microsoft and Yahoo!. If the deal goes through next year as planned, a combined Microsoft-Yahoo! platform will account for about 28% of online searches in the U.S., all of them run through Bing's underlying technology.

Google isn't exactly quaking in its boots, but for the first time in years the search giant is hearing footsteps. According to one Google insider, the week Bing launched many employees at the company's Mountain View, Calif., headquarters could be seen punching queries into Bing to see how the results compared with Google's. (There's now a website that will do a side-by-side comparison for you: http://www.bing-vs-google.com/)

Inside the Googleplex, employees were particularly interested in getting a sense of Bing's search algorithm. The algorithm is a search engine's secret sauce, the complex set of instructions that determine which search results are returned and in what order. Google's algorithm is a trade secret, one guarded as jealously as the recipe for Coca-Cola.

What they might have discovered by now is that Bing represents something Google hasn't faced in a long time: a well-designed and carefully thought-out search rival backed by a competitor with very deep pockets. "In some ways, the search experience with Bing is better than Google's," says Craig Stoltz, a web consultant and the author of the blog Web2.0h...Really?. "It seems like Bing returns shorter, more valuable results. Google returns million of results, but a lot of them are pretty useless. That's a way that Google as a tool is vulnerable."

A Google spokesperson declined to comment on Bing, much as an incumbent prefers not to debate an upstart challenger. In a statement, Google said, "We have many competitors, and we take them all seriously." In other words, Google this, Bing.

Microsoft isn't quite so coy about the competition. Google was the target from Day One. "When we developed Bing, we said, 'O.K., let's really understand the market leader,' " says Danielle Tiedt, general manager of Microsoft's online-audience business group. "What are they doing well, what are they not doing well, and how can we differentiate ourselves?"

Bing has received surprisingly good reviews from critics, considering that complaining about Microsoft products is an armchair sport for bloggers. Bing, described by Microsoft as a "Decision Engine," targets four major categories of search: shopping, local, travel and health. Bing's home page is sumptuously colorful, displaying a different, richly detailed photograph every day. It's a deliberate attempt to distinguish Bing from Google's minimalist look.

Bing's search results are presented somewhat differently than Google's. A Bing results page has two components: a left-hand navigation panel that lets users click on related or recent searches, and a center panel that groups the search results into what Bing deems logical categories. Search for Obama, for example, and you'll see results grouped into categories such as Obama news, Obama issues, Obama facts and Obama biography. Google does have a type of categorization in its "related searches" feature, but it's not nearly as prominent as what Bing's. Bing also has a handy video preview feature in which you can hover your cursor over a video thumbnail and see highlights from the video play automatically.

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One area where Bing especially hopes to distinguish itself from Google is in travel searches. As anyone who has done a Google search for "inexpensive new york hotel" or "cheap air fare to london" knows, the results are often close to useless, a jumble of promotional sites and lists that point to other lists. Bing hopes to trump Google in travel with its Farecast technology, designed to locate the cheapest flights and hotels on the basis of recent trends. Farecast charts the peaks and valleys of airfares and room rates for a particular itinerary over the course of several months and predicts prices for the near future. Users can then decide whether to buy now or wait for prices to fall. (A study by an independent auditing company found that Farecast's predictions were 74.5% accurate and that travelers purchasing two plane tickets saved an average of $55 on airfare.)

One detail that's missing from Bing's home page is any mention of Microsoft. (There are small tabs that link to MSN and Windows Live, but they're easy to miss.) Omitting Microsoft's name is no accident — it's an effective way of positioning Bing as a cool new search engine rather than a site sponsored by a gigantic corporation that's often seen as the antithesis of cool.

Microsoft's renewed commitment to search is only the latest example of Google and Microsoft invading each other's territory. Shortly after Bing's debut, Google announced a new operating system called Chrome, meant to take a bite out of Microsoft's Windows franchise. The Chrome OS, scheduled to be rolled out in the fall, is designed to run on netbooks, the small, inexpensive laptops that have surged in popularity. By tying the Chrome OS to popular applications like Gmail, Google Chat and Picassa, Google hopes to give Microsoft a run for its money in the operating-system market, just as Microsoft hopes Bing will do in the search business.

As for Microsoft, even the world's largest and most powerful software company can't afford to cede territory. In July, Microsoft reported its worst fiscal year since the company went public in 1986, with annual revenues from the company's flagship Windows product declining for the first time ever. In the fall, Microsoft will release a new operating system, Windows 7, to rescue the tepidly received Windows Vista.

All of which makes Bing an important rearguard action for Microsoft, a way to make Google sweat about the search space while Microsoft defends its operating-system market. Microsoft plans to spend 5% to 10% of its operating income on search over the next five years, a war chest that works out to about $10 billion per year.

Taking on Google has long been a losing proposition. But Bing, combined with Microsoft's search alliance with Yahoo!, changes the contest. As Microsoft CEO Steve Ballmer put it when announcing the Yahoo! deal, his company can now "swing for the fences in search." Suddenly, search has become — bing! — a whole new ball game.

• Tom McNichol
• In the world of online search, there's Google, and there's everyone else. Microsoft's new search engine hopes to change that