Aug 252010

Tuesday’s announcement shows the initial goal of the deal has been met.

Yahoo experimented with various search engines – AltaVista, Inktomi and AlltheWeb – and relied, for a time, on main rival Google’s search engine. The search pioneer then launched its own search engine in 2004.

After being the dominant search engine in 1990s, Yahoo lost its search top spot gradually. It happened as the search pioneer turned focus on becoming an aggregator of diverse content on the web and providing an array of services. The distraction gave Google the space and time to emerge as a synonym for web search.

As Google’ search engine started delivering faster, more comprehensive search results, Yahoo became its licensing partner and started using Google search engine to power its own search operations. However, as analysts have said for a long time now, with the ‘Powered by Google’ logo appearing on Yahoo search pages, Yahoo unwittingly helped Google get more exposure.

Finally in February 2004 Yahoo dumped Google search technology, replacing it with its own search technology which combined a mix of search technologies like Inktomi, AltaVista and AlltheWeb.

Yahoo had bought Inktomi reportedly for $280 million in late 2002. And its acquisition of Overture gave it two additional search engines, AltaVista and AlltheWeb.

However, Yahoo did not immediately shift from Google technology, a strategy widely criticized by technology analysts.

Last year, Microsoft and Yahoo agreed a deal under which Microsoft would give the search technology for Yahoo’s Web sites. The deal opened a new avenue for Microsoft’s search engine, overhauled and renamed as Bing and for Yahoo, the opportunity lay mainly in strategic and financial aspects.

Under the deal, Yahoo was to get 88 percent of the search-generated ad revenues from its own sites during the first five years of the 10-year deal. Microsoft would get the remaining 12 percent of revenues. Strategically, the deal would help Yahoo continue to focus on its core strengths of running Web media sites and marketing on-line display advertising.

The deal gave Microsoft a new opportunity to fight the hegemony of Google, having failed so far in its solitary bid to mount a challenge against the search giant. The combined search strength of Yahoo and Bing was expected to make the search market more competitive and dynamic, offering a more meaningful opposition to Google.

The deal took place after a bitter, hostile takeover bid by Microsoft was abandoned in 2008, leading to shareholder anger and the consequent ouster of founder CEO Jerry Yang.

The two companies had said it would take two years to fully implement the project to integrate search operations globally.

Yahoo and Microsoft are now working on Yahoo’s transition to using AdCenter, Microsoft’s self-serve search ad platform. Yahoo CEO Carol Bartz has said Yahoo would start using AdCenter in October.

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