They both have silly names, were started by Stanford University graduate students and have become partners, but there is apparently some unease in the relationship between Yahoo! and Google--so Yahoo!, whose history dates back to 1994, is redesigning its search engine in a bid to compete with Google, the reigning king of searches that began in 1998.
Yahoo!, a public company with just under $1 billion in revenue, says it is revamping its search engine in a bid to regain its leadership of the search engine business, a lead it has lost to Google. But it's an odd kind of race since just last October Yahoo! renewed its deal with Google by which Google provided the search facility for Yahoo!. At that time, Yahoo! also ended its traditional barrier searches generated by humans and those generated by computer programs known as Web crawlers.
Since then, Google, which had been a search engine only, got into the news business. The privately held Mountain View, Calif., company also beefed up it news-gathering feature--a traditional feature of Internet portals like Yahoo!, which is based eight minutes away via U.S. 101 in Sunnyvale, Calif.
Yahoo! believes its new search engine will provide more useful information than Google's and be simpler to use. The idea is to combine Google's index with Yahoo!'s customized services spanning sports, driving directions and weather reports.
Of course, it is the absence of things like driving directions and weather reports that makes Google simplicity itself. So its unclear how Yahoo! will better Google, even while continuing to use Google, which, as a verb or noun, has become synonymous with Web searching. Privately held Google, according to our estimates, has become a $2 billion brand, while hardly advertising at all.
Yahoo!, however, is worth $14.4 billion, based on its current market capitalization. (In 2002 it reported net income of $42.8 million.) Overall, it's more famous than Google, which we know because we asked Google. A Google search for Yahoo yielded 86.6 million results. A Google search for Google yielded just 18.6 million. Searching for both on Yahoo! resulted in a similar disparity--but Google came up with a few more results whether the hunt was for Yahoo! or for Google itself.
This means, in theory, that Google knows a bit more about Yahoo! than Yahoo! knows about itself. Certainly, the public seems to trust Google more. According to The Search Engine Report Newsletter, Google handles an average of 112 million searches a day and Yahoo! handles about 42 million. Most of Yahoo!'s results are generated by Google's software. Yahoo! has not said it would sever its relationship with Google, and it admits that even many of its registered users go elsewhere--that is, to Google--to do their searching.
But Yahoo!'s purchase of Inktomi--a search engine company which is also in the business of caching Web content to speed its delivery--has been seen as one possible way for Yahoo! to wean itself from Google. Both Yahoo! and Google have been increasing their sales of "sponsored" searches--that is, search results that pop up high on a page. This is the one way, so far, that anyone has been able to generate revenue from searches.
The actual people who run Google--and there are such people--have not commented on Yahoo!'s news.
Press Release
YAHOO! AND INKTOMI ANNOUNCE COMPLETION OF ACQUISITION
Inktomi a Wholly-Owned Subsidiary of Yahoo
Sunnyvale & Foster City, CA -- March 19, 2003 -- Yahoo! Inc. (Nasdaq: YHOO), a leading global Internet company, and Inktomi Corp. (Nasdaq: INKT), a leading Web search provider, today announced the completion of Yahoo!'s acquisition of Inktomi.
"Bringing together a powerful combination of Yahoo!'s global audience and unmatched breadth and depth of services with Inktomi's leading search technology, will allow us to create one of the most relevant, comprehensive and highest quality search offerings on the Web for both our affiliate partners and Yahoo!," said Terry Semel, Yahoo! chairman and CEO.
"The acquisition enables Yahoo! to integrate Inktomi's world-class technology throughout the network as well as offer more value to consumers and businesses through programs such as paid inclusion, which provide higher-quality commercial search results," Semel added.
"We are very excited about gaining direct access to the end-product so that we can continue to improve and innovate Yahoo!'s leading search platform based on a clear understanding of consumer needs," said Vishal Makhijani, Inktomi vice president and general manager of Web search. "Results of a recent consumer blind test we conducted have already shown that Inktomi's search relevancy rates among the highest in the industry."
As a result of the merger, which was completed on March 19, 2003, each outstanding share of Inktomi common stock (other than shares for which appraisal is sought under Delaware law) has been converted into the right to receive $1.65 per share in cash. Wells Fargo Bank Minnesota, the Paying Agent for the merger, will within the coming week mail transmittal materials to Inktomi stockholders as of the merger date. Inktomi stockholders should not submit stock certificates unless accompanied by these transmittal materials.
About Inktomi http://www.inktomi.com
Based in Foster City, Calif., Inktomi is the leading provider of OEM Web search and paid inclusion services. A pioneer in Web search technology, Inktomi provides millions of users worldwide with the freshest and most relevant search experience, and ensures that thousands of online retailers have their content constantly represented. The company's customers and partners include Amazon.com, eBay, Lycos/HotBot, MSN, Overture and WalMart.com.
About Yahoo! http://www.yahoo.com
Yahoo! Inc. is a leading provider of comprehensive online products and services to consumers and businesses worldwide. Yahoo! is the No. 1 Internet brand globally and the most trafficked Internet destination worldwide. Headquartered in Sunnyvale, Calif., Yahoo!'s global network includes 25 world properties and is available in 13 languages.
http://www.forbes.com & Inktomi Press Releases
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