X1 Technologies is to release an upgrade of its desktop search tool for enterprises that use Yahoo technology.

The bundling of Yahoo's search toolbar and inclusion of Yahoo web search technology with the new version of X1 Enterprise Client could be the beginning of a more extensive integration of Yahoo functionality with X1's products.

"The initial version of this [web search] is pretty simple, but we'll continue to integrate Yahoo's stuff more deeply into the product over the course of the year," said Josh Jacobs, X1's president. "You'll see the addition of Yahoo features specifically designed to be used in a corporate environment."

At this stage, X1 Enterprise Client will, for the first time, feature a web search button that delivers results from Yahoo's search engine by launching an external page. X1 will share revenue with Yahoo from traffic it sends to the search engine. The toolbar comes up as an option during the X1 tool's installation.

Although no decisions have been made, X1 and Yahoo might collaborate on instant messaging (IM), he said. "IM is critical in the workplace, and searching IM logs is an incredibly powerful feature at work, but probably not that necessary for consumers," Jacobs said. He also sees potential for some Yahoo search technology to find its way into X1's tool.

X1 could be a conduit to the enterprise software market that Yahoo abandoned in 2003 when it dissolved its Yahoo Enterprise Solutions unit. Yahoo further distanced itself from the enterprise when it discontinued its Yahoo Business Messenger IM product in 2004.

With X1, Yahoo can sample the enterprise market without needing a full-fledged division. "What we're doing in this partnership is providing Yahoo with a way to get technology that's specifically designed for those people at work," he said.

Two Yahoo representatives declined to comment on this X1 partnership, saying they were unfamiliar with it. X1 and Yahoo have been partners for several years. Yahoo's consumer-orientated desktop search application is based on X1 technology.

Yahoo's new-found interest in the enterprise comes as Google beefs up its enterprise search products and Microsoft boosts its enterprise software business, particularly in search.

X1 has also announced that from now on it will give away X1 Enterprise Client, which previously started at US$74.95. The tool has also been upgraded with new features such as the ability to search Outlook calendars and task lists, to drag-and-drop search results and to index documents in real time.

X1 is also unveiling two modules that extend its X1 Enterprise Server's ability to search Microsoft Exchange and Microsoft SharePoint files. The Exchange module is available now and the SharePoint module will be ready in August.

X1 is also launching a website with resources for IT managers interested in desktop search and X1's products, as well as an evaluation kit