IHT: Search engines rev up in the race against Google

IHT: Search engines rev up in the race against Google When it comes to Internet searching - and the advertising dollars that come with it - everyone seems to be playing catch-up with Google, the No. 1 search engine, which is preparing for an initial public offering. . On Tuesday, Yahoo, the owner of the second-most-used Internet search engine, said it was starting to test a service that helps consumers search for information about local businesses. . Ask Jeeves, another search engine, also said on Tuesday that it had formed a partnership with IAC/InterActiveCorp's Citysearch group of Web sites, to get access to information with a local business focus. . The moves follow Microsoft's announcement on Monday that it was aiming to make search services customized so that results would be based on individual preferences and interests. . "We're going to make search extremely personal," Bill Gates, Microsoft's chief, told an audience of computer science and technology researchers. . The emergence of search as a key technology platform for computer users in their homes and offices, driving everything from online shopping to business research, took many in the high-tech industry by surprise. But what really has caught the attention of executives who once regarded search as an afterthought has been the recent explosion of search-enabled online advertising. Microsoft, for example, though still only the No. 3 player in search, saw a 43 percent growth in online advertising in the year ended June 30, enabling its MSN business to record a profit for the first time. "Search has become the Holy Grail for Microsoft," said Gene Walton, founder of Walton Holdings, an independent equities research firm in New York. "No one expected paid search ads to make so much money. It's a new trend, and it's a trend that no one thought was going to work. That's why Microsoft avoided it. Now they want in." . The company is investing $100 million to enhance search on its MSN consumer Internet service alone, and millions more on multiple search efforts throughout the company. . At this point MSN still relies on search technology licensed from Yahoo. But that will soon be changing. Microsoft developers are readying their own back-end search technology, expected to be installed in the next six to 12 months. . Yahoo also is preparing for the day when Microsoft drops Yahoo's search technology and installs its own technology on its MSN site. . Yahoo's new local service compiles information from Yahoo's sites, including maps, local guides, yellow page phone directory listings and professional restaurant reviews. Yahoo Local is adding user comments. . "They are looking for ways to bring in new advertisers by training users to do local searches," said Charlene Li, an analyst with Forrester Research in San Francisco. . The early lead in the search business was grabbed by Google, a start-up in Mountain View, California, that was incorporated in 1998 by Sergei Brin and Larry Page, computer science graduate students from Stanford University. . Google, which earned $79.1 million on revenue of $700.2 million in the second quarter, according to a document filed last week in connection with its coming initial public offering, makes most of its money through "paid placement" and "contextual" ads. The former surround regular search results on Google's pages, and are related to the search topics, while the latter appear next to related content on third-party sites to which Google provides search technology. . Google's platform was used for 36.8 percent of searches, followed by Yahoo with 26.6 percent, MSN with 14.5 percent, and the AOL unit of Time Warner with 12.8 percent, according to a May survey by comScore Networks, a consulting company in Reston, Virginia. . Still, Internet search companies including Google are seeing slower growth of their sales to national advertisers, and they are developing services to offer more finely focused information. Google itself began testing its own locally focused search engine in March. . Yahoo saw its second-quarter revenue rise only 10 percent from the first quarter, the slowest quarter-to-quarter growth in more than a year. Google reported a similar slowdown. Its second-quarter sales rose 7.5 percent from the first quarter, compared with 27 percent growth a quarter earlier, the company said last week in a filing with the U.S. Securities and Exchange Commission. . (Bloomberg, Reuters, Boston Globe) .When it comes to Internet searching - and the advertising dollars that come with it - everyone seems to be playing catch-up with Google, the No. 1 search engine, which is preparing for an initial public offering. . On Tuesday, Yahoo, the owner of the second-most-used Internet search engine, said it was starting to test a service that helps consumers search for information about local businesses. . Ask Jeeves, another search engine, also said on Tuesday that it had formed a partnership with IAC/InterActiveCorp's Citysearch group of Web sites, to get access to information with a local business focus. . The moves follow Microsoft's announcement on Monday that it was aiming to make search services customized so that results would be based on individual preferences and interests. . "We're going to make search extremely personal," Bill Gates, Microsoft's chief, told an audience of computer science and technology researchers. . The emergence of search as a key technology platform for computer users in their homes and offices, driving everything from online shopping to business research, took many in the high-tech industry by surprise. But what really has caught the attention of executives who once regarded search as an afterthought has been the recent explosion of search-enabled online advertising. Microsoft, for example, though still only the No. 3 player in search, saw a 43 percent growth in online advertising in the year ended June 30, enabling its MSN business to record a profit for the first time. "Search has become the Holy Grail for Microsoft," said Gene Walton, founder of Walton Holdings, an independent equities research firm in New York. "No one expected paid search ads to make so much money. It's a new trend, and it's a trend that no one thought was going to work. That's why Microsoft avoided it. Now they want in." . The company is investing $100 million to enhance search on its MSN consumer Internet service alone, and millions more on multiple search efforts throughout the company. . At this point MSN still relies on search technology licensed from Yahoo. But that will soon be changing. Microsoft developers are readying their own back-end search technology, expected to be installed in the next six to 12 months. . Yahoo also is preparing for the day when Microsoft drops Yahoo's search technology and installs its own technology on its MSN site. . Yahoo's new local service compiles information from Yahoo's sites, including maps, local guides, yellow page phone directory listings and professional restaurant reviews. Yahoo Local is adding user comments. . "They are looking for ways to bring in new advertisers by training users to do local searches," said Charlene Li, an analyst with Forrester Research in San Francisco. . The early lead in the search business was grabbed by Google, a start-up in Mountain View, California, that was incorporated in 1998 by Sergei Brin and Larry Page, computer science graduate students from Stanford University. . Google, which earned $79.1 million on revenue of $700.2 million in the second quarter, according to a document filed last week in connection with its coming initial public offering, makes most of its money through "paid placement" and "contextual" ads. The former surround regular search results on Google's pages, and are related to the search topics, while the latter appear next to related content on third-party sites to which Google provides search technology. . Google's platform was used for 36.8 percent of searches, followed by Yahoo with 26.6 percent, MSN with 14.5 percent, and the AOL unit of Time Warner with 12.8 percent, according to a May survey by comScore Networks, a consulting company in Reston, Virginia. . Still, Internet search companies including Google are seeing slower growth of their sales to national advertisers, and they are developing services to offer more finely focused information. Google itself began testing its own locally focused search engine in March. . Yahoo saw its second-quarter revenue rise only 10 percent from the first quarter, the slowest quarter-to-quarter growth in more than a year. Google reported a similar slowdown. Its second-quarter sales rose 7.5 percent from the first quarter, compared with 27 percent growth a quarter earlier, the company said last week in a filing with the U.S. Securities and Exchange Commission. . (Bloomberg, Reuters, Boston Globe) .When it comes to Internet searching - and the advertising dollars that come with it - everyone seems to be playing catch-up with Google, the No. 1 search engine, which is preparing for an initial public offering. . On Tuesday, Yahoo, the owner of the second-most-used Internet search engine, said it was starting to test a service that helps consumers search for information about local businesses. . Ask Jeeves, another search engine, also said on Tuesday that it had formed a partnership with IAC/InterActiveCorp's Citysearch group of Web sites, to get access to information with a local business focus. . The moves follow Microsoft's announcement on Monday that it was aiming to make search services customized so that results would be based on individual preferences and interests. . "We're going to make search extremely personal," Bill Gates, Microsoft's chief, told an audience of computer science and technology researchers.