Along with reporting strong fourth-quarter earnings last week, Yahoo Inc. also confirmed speculation that it will be switching its Web search to its own technology in the first quarter of this year.
The switch, once it occurs by the end of March, will mark the beginning of a bigger battle for market share in the search market and could happen around the same time as search leader Google Inc.s highly anticipated initial public offering.
Yahoo has been using Googles algorithmic search technology on its sites since 2000. It now plans to drop Google in favor of its own algorithmic search technology developed primarily through its acquisition last year of Inktomi Corp.
"We have said and continue to say that Yahoo will be using its own algorithmic process sometime during first quarter of this year," said Yahoo Chairman and CEO Terry Semel in an earnings conference call.
Yahoo had already begun moving some of its search over to Inktomi, most notably with its new product search capabilities introduced last year on Yahoo Shopping, Semel said.
Google is by far the most popular search engine on the Web, accounting for about 79 percent of U.S Web searches, according to data from comScore Networks Inc. But much of that market share comes from the use of its search engine in deals with Yahoo and America Online Inc. Yahoos sites, even with search results coming from Google, account for 27.7 percent of Web searches, comScore reports.
Also during the earnings call, Yahoo made clear that by making gains in its share of Web searches it hopes to boost its performance for shareholders.
Yahoo may not be the only company battling with Googles search engine. Microsoft also has begun developing its own search technology, though the company has not detailed its plans. Reports came in June that the company had begun crawling Web sites with its own MSNBot technology and launched a Web site answering questions about the Web crawler.
Microsofts MSN Search currently uses Inktomi and Overture Services Inc., also bought last year by Yahoo, for its search results. Microsoft in October renewed until 2005 its contract to use Overture for paid placement search results despite Yahoos acquisition.