Clash of the superpowers: Google, Yahoo!, and MSN vie to control search technology.
There's long been competition in search, stretching back to when search engines as we know them began to emerge in 1994 and 1995. Even in those early days, search engines such as Yahoo, Infoseek, and Lycos were popular with consumers. Though some old players have passed and new ones, such as Google, have emerged, the search sector itself has retained its popularity -- and the competition to gain users that goes with it.
If competition was always there, why do we hear so much about "search wars" now? In the past, popular search engines engaged in portal wars rather than focus on the search battlefront. Portal-war survivors woke up to discover search was hot, a money maker, and increasingly dominated by then-upstart Google.
Today, it's a clash of search superpowers. Google, Yahoo, and Microsoft are major players vying to control Web search technology and, hopefully, secure their destinies.
With Google's pre-IPO release of financial information, expect renewed focus on the search wars. Google was a giant missing piece of the puzzle for those who wanted to calculate search's value.
Overture's public filings kicked off Wall Street's interest in search, as I explained at the time. Google's public filings will add fuel to the fire. Renewed speculation about who will "win" the search wars will follow.
With this background in mind, a look at how the search wars started.
Yahoo Declares War
December 23, 2002, is a day that may go down in infamy for Google. That's when Yahoo announced it would buy Inktomi, a company with crawler-based search technology.
"You're the enemy," Yahoo effectively told Google.
Why was this a declaration of war? Yahoo had long used Google's crawler-based results, the unpaid listings, or "algorithmic results" as the financial community is fond of calling them. These are the search engine equivalent of a newspaper's articles or a TV network's programs. These main results are the editorial content that attracts searchers, who may then in turn also view ads.
The Inktomi purchase meant Yahoo would produce programming itself rather than rely on Google. Yahoo said it made the move to control its own destiny. It wanted to create new technology it hoped would retain existing users and perhaps attract new ones away from services such as Google.
Google had an idea war with Yahoo was coming. In April 2002, Yahoo signed a multiyear deal for Overture's paid listings. It was a major partnership Google had hoped to win, as it potentially represented far more revenue than a deal to provide just editorial results.
The Phony Search War
Although Yahoo had declared war against Google, it was a phony war that lasted over a year. Yahoo continued to use Google's unpaid results rather than shift to Inktomi.
Officially, Yahoo was preparing Inktomi for use on its own site. This is a weak argument. Inktomi was already a strong search engine when Yahoo purchased it. It seems as if some contractual obligations forced Yahoo to continue with Google throughout 2003.
Of course, Yahoo's rollout of its own technology was complicated by a wave of acquisitions. Last October, Yahoo bought Overture. Earlier that year, Overture itself purchased the crawler technology used by AltaVista and AlltheWeb.com, hoping it could take on Google.
As a result, Yahoo had considerable crawler-based armament: Inktomi, AltaVista, and AlltheWeb. By February of this year, it had assembled this into a new search engine called Yahoo Search Technology. Let's call it Yahoo Search for short. That month, Yahoo deployed Yahoo Search on its own site, dumped Google, and engaged in the first real search wars battle.
Yahoo finally severed ties with Google. At last, those who wanted a Google alternative from Yahoo got one. A new, strong search voice emerged on the scene (though Inktomi, AlltheWeb, and AltaVista were silenced).
Early statistics suggest Yahoo's use of its own technology hasn't caused it to lose users. This implies the technology is at least as good as Google's.
Microsoft Ramps Up
Microsoft declared search war in April 2003 by announcing it planned to develop its own search technology. More recently, Bill Gates and Steve Ballmer said Microsoft's failure to develop its own search technology was one of the biggest mistakes the company has made.
Though Microsoft declared war, it isn't yet in the battle. The company is still building its military. Meanwhile, it's dependent on lend-lease shipments of paid and unpaid listings from current ally, and future enemy, Yahoo. MSN's new search engine isn't expected until late this year, at the earliest.
Some observers view Microsoft's only opponent as Google and thus assume there will be a repeat of that other classic battle: Microsoft versus Netscape.
In reality, the fight will be against Yahoo and Google, both with a sizable share of the search market and proprietary technology. To some degree, Microsoft is also taking on AOL, another giant in the search space, though without its own technology. Unlike the Netscape battle, Microsoft has no head start by licensing technology to build on.
In addition to fighting more competitors, Microsoft isn't in a purely technological battle. Search has roots in technology, but overall it's a media product. It's currently difficult to lock users into a particular search product, as opposed to a browser. Search requires no specific software application.
What about desktop integration? As I've written, that exists in Windows. It hasn't yet stopped use of Google, Yahoo, and others. There's a potential advantage, but not necessarily a killer one. When Longhorn, the new version of Windows, rolls out over a year from now, perhaps things such as Google's new Gmail system will have redefined how we use computers, assuming the service gains acceptability.
The Winner? Think TV Networks and Cable
I'm constantly asked who will win the search wars. Many others are speculating, too. No one knows, of course. Far too many factors can't be predicted.
Nevertheless, the limb I've been walking out on is to liken search engines to television. Write-ups of my recent Search Engine Strategies keynote in New York explain this in more depth, and I might expand that into its own column. The overview, in the meantime:
In television, at least in the U.S., a few major broadcast networks (ABC, NBC, CBS, Fox) consistently have a large number of viewers. But none ever "kills" the others, though one may get a larger share, depending on program quality.
So in search, I don't think Microsoft will wipe out Google, Google will eliminate Yahoo, or AOL will suddenly disappear. It's more likely you'll see wins and losses, but all will remain giant players in the near-to-medium future.
Will little players such as Gigablast, Feedster, and Daypop survive? Of course. Think cable TV. These and other specialty search engines will attract their own unique audiences.
Some may be integrated into major search engines as invisible tab use grows, through partnerships or licensing agreements. Others will continue on their own. Perhaps they'll only make millions instead of the major players' billions. But as long as they're profitable and provide a good service, everyone gains.
Want more search information? ClickZ SEM Archives contain all our search columns, organized by topic.
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