As widely reported, Yahoo! bought desktop software maker Konfabulator (what a great company name!). Local search and local apps (weather, maps, etc.), among other things, can be taken beyond the browser onto the desktop.
Nothing new there conceptually. But unlike some of the cludgey desktop-based search tools that have come before, this is a much better user experience and much more interesting. If you're a Mac user you already know. (The company currently offers widgets for the PC, but PC widgets aren't yet widely used.)
It's sort of like the toolbar on steriods — sort of. There are lots of potential competitive implications to explore. (Here's a radical one: Maybe one day the browser goes away.)
These widgets are really cool and useful. And to the extent that people download and use them, it could be a leverage point for Yahoo! For example, if I've got search on my desktop in the form of a widget, that's better than a toolbar in terms of immediacy.
We'll see what happens.