Yahoo! and Microsoft are building research labs to do research in Search to compete against Google. As pointed out in this article the real fight is not about Search but about Advertisements:
Instead, the real opportunities come from getting more effective ads in front of users. The so-called “monetization of search� is what this arms race is all about.
It is important to understand that Google transformed Search to Advertisements and is really trying to be a New Media company. Understanding user intent and using it to monetize is the basic goal, search happens to be a way to bring them to site.