No, this does not mean that Yahoo! the site is going away. Far from it. It means that Y! has officially offloaded it to Microsoft.
Yahoo! has made it very clear these days (and their CEO even said so) that they are not a search company, so now Y! is all about content.
This is part of the reason why Y! has been making major changes over the past few years – mostly in the form of cutting the chaff from the wheat, so to speak. Yahoo! 360 is gone, Geocities will be gone in October, Yahoo! Live the short-lived broadcasting service (like Ustream/BlogTV/etc.) closed in ‘08, Jumpcut, another Y! property, is gone, and so on. And there are plenty more.
Y! has been dropping a whole lot of hammers, no question. They want to concentrate on things that will make them grow as a company, and search is definitely not one of them.
At this point I personally do not have faith in the Y! brand due to the fact they can’t seem to find a winner with anything new they produce. And instead of taking their existing services and improving upon them, they get dropped instead. For those of us that actually used those services, we as the users get screwed in the end because any effort we put into using it was for nothing. This is not exactly what we’d call a confidence booster in the Y! brand.
There are seven things from Y! that I know people use, that being mail, messenger, games, Flickr, maps, personals and answers – all of which have tenure. None of this stuff is new. In fact most of it is ancient, internet-wise.
Do you know anybody that uses OMG? Or real estate? Or Shine? Or Buzz? Or Green? If you said, "No, and um.. I’ve never heard of those Y! services", that wouldn’t surprise me a bit. The problem is that this new stuff is what Y! wants you to use. But the sad part is that had you not read it here, you most likely didn’t know they existed.
In comparison, when Google offers a new service, they let you know about it. The same is true for Microsoft. When something new comes around in the Windows Live system, you’re informed. Both these companies put a good effort into letting the masses know of the good/cool/interesting things they make. But as for Yahoo? Not so much. That’s a problem and hopefully one they will fix.
Is Yahoo’s decision to offload the search to Microsoft a good thing, or is this the beginning (or the continuation) of the end for Yahoo?

I think it is a great thing that Yahoo! is dropping search. At least you know Microsoft (Bing) is committed to making a good search tool where Yahoo didn’t seem to care much about search.
I guess it all depends on how good your listings are on Bing vs Yahoo!
I think it’s a good thing that Yahoo! dropped the search. They should concentrate on the things that make them stronger. I’ve had a Yahoo email for it seems like forever. It may not be the best but, it works well I’ve been able to adapt pretty well to the changes they’ve made over the years. I’m also a big Flickr user too. Let Microsoft take on Google in the search department.
Good yahoo search was terible the should drop their mail to i have a gmail and a yahoo account and all i get on yahoo is spam even if i block it it still comes back the only i dont delete it is i have a friend the wont email my gmail account