Yahoo announced on Wednesday that it dumped Google's popular search engine in the US - the first punch in an escalating fight between internet heavyweights.
Anticipating the blow, Google tried to soften the impact by releasing an update to its index of some six billion Web pages, images and Usenet postings.
Once partners, the top internet portal and the most popular search engine provider have become fierce rivals, fighting over how people access information online.
Searching the internet has become big business and will soon become a three-way race, as software giant Microsoft prepares to introduce its own search technology.
"What's at stake is the starting point for many people's internet experience," said Ms Charlene Li, a principal analyst with Forrester Research.
Also at stake is potentially billions of dollars paid by advertisers for placement in internet search results. That market is expected to be between $2.5 billion (€1.9 billion) and $3 billion this year, and could double in the next few years, according to several research firms.
Yahoo chief executive Mr Terry Semel wants to make search integral to his turnaround of the once-struggling company. In addition to revenue from search-related advertising, he wants to use the feature to tie together many of Yahoo's internet properties into a "digital theme park" that users don't have to leave to find information elsewhere on the Web.
Google still powers the search engines on many of Yahoo's international websites, but Yahoo plans to switch to its own search technology worldwide within a few weeks, said Mr Jeff Weiner, a Yahoo senior vice-president.
The technology was developed by Inktomi, which Yahoo acquired last year for $235 million.
Buying Inktomi was one of several steps Yahoo took as it prepared to challenge Google.
In addition to Inktomi, Yahoo spent $1.8 billion for Overture Services, whose "pay per click" service lets advertisers buy placement next to search results.
Google, which is reportedly planning an initial public offering this spring, said Yahoo's move was long anticipated. Google stole some of Yahoo's thunder on Tuesday, announcing that it had added one billion additional Web pages to its index since August, bringing the total to 4.3 billion, as well as 880 million images and 845 million messages from the Usenet bulletin boards.
Yahoo's "announcement really doesn't have a material effect on our business from a financial perspective", said Mr Jonathan Rosenberg, Google's vice-president of product management.
Yahoo's websites were visited by 111 million people in January, making it the most popular internet portal, according to comScore. But Google is the leading search engine, with 35 per cent of all US searches.
Microsoft relies heavily on Yahoo, using Inktomi for its regular search results and Overture for paid search.
However, the software giant plans to build internet search directly into the next generation of Windows, which could give PC users a way to bypass Google and Yahoo. - (LA Times, Washington Post)
