The Big Switch! Yahoo dropping Google for Inktomi

Yes, the search war continues to rage on.

Yahoo made it official January 14th with an announcement from Chief Executive Terry Semel that it will drop search partner Google sometime during the first quarter of 2004 in favor or its own technology. While this move was expected, especially since Yahoo acquired Inktomi in December 2002, it's the first time Yahoo has actually disclosed a timeframe for replacing Google.

"We've been hard at work with the assets that we've acquired to develop our (own) algorithmic search engine," Yahoo Chief Financial Officer Susan Decker said in a phone interview. "We'll be swapping that out in Q1."

Inktomi has developed an algorithmic search technology similar to Google's that both indexes pages and assigns page ranking based on search terms. Once an ally, Google is now more of a rival and contender for the lucrative ad revenue that is generated from targeted ads at the moment people are searching for something.

Last year Yahoo spent over $2 billion buying Overture Services Inc. and Inktomi Corp and is now beginning to roll out offering based on those acquisitions with Overture's technology for sponsored ad's (paid search results) and Inktomi's search technology.

Currently, Google processes roughly 80% of all Internet search requests through it's distribution deals with Yahoo, AOL and AskJeeves. However, when Yahoo switches from Google sometime this quarter that share is expected to drop to about 54% while Yahoo's share is expected to increase based on it's own search traffic and on a deal with Microsoft to provide MSN with Inktomi results.

Now what impact will there be on both Yahoo and Google when MSN unveils its own search technology by the end of 2004? Yes, the war will wage on.