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The company held a press event to address what it called "misconceptions" about its search efforts.
"Yahoo has been in search, is in search and will continue to be in search," said Yahoo's search boss Shashi Seth.
"That is the stake we have put in the ground. We will continue to show innovation and drive lots of great features and products into the marketplace and wow our users," said Mr Seth who took up his post just three weeks ago.
The partnership with Microsoft is still going through the regulatory process but is expected to be finalised in the next few months.
Many bloggers said at the time that the deal signalled Yahoo's departure from search.
Mr Seth admitted to the BBC the view of Yahoo changed as a result.
I wouldn't say it killed us but it did make a dent. It is going to be a really tough job going forward but I think we are well equipped to do well in that space."