NEW YORK (CNNMoney.com) - Amazon.com has dropped Google as its search provider in favor of Microsoft, an important victory for the Seattle software maker as its battle with the 400-pound gorilla of search heats up, according to a report Tuesday.

Searches on Amazon.com are now powered by Windows Live Search, Microsoft's new search engine that's still in the testing phase, the Washington Post said Tuesday.

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"Our engineers have done some testing and evaluation, and overall we concluded this was an interesting option to discover information," Amazon executive David Tennenhouse told the newspaper.

The news is significant for Microsoft (Research) because moves by Amazon (Research), one of the world's largest Web-based retailers, are closely watched by other Internet shopping sites, according to the article.

The battle between Microsoft, the world's largest software company, and Google (Research), the world's largest Internet search provider, is intensifying as Microsoft tries to muscle more Internet market share from the search industry leaders, Google and Yahoo! (Research).

Microsoft recently said it was plowing money into research and development, and Chairman Bill Gates was quoted in a report describing the relationship between his firm and Google as "hypercompetition."

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