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For the leading companies in the search-engine market, 2004 was a year to fortify their services for the fight ahead.
As the year ends, the battle line lies among three top competitors: Google Inc., Microsoft Corp. and Yahoo Inc. Waiting in the wings are Ask Jeeves Inc, which doubled its search share during the year, and a rash of startup companies hoping to reinvent search the way Google reinvigorated it with its PageRank and other technologies.
Yahoo made the first major move of the year, dropping Google for its own search-engine results. The switchover was nearly a year in the making and resulted from Yahoos earlier acquisitions of Overture Services Inc. and Inktomi Corp.
Yet Yahoo is about to reap what it has sown. Inktomi, now merged into Yahoos search-engine technology, powers Microsofts MSN Search site, and Bill Gates isnt about to be left relying on its top Internet competitor for its search future.
Microsoft, in no uncertain terms, declared its entrance into the search wars this year. The germ of its efforts was unveiled earlier in November, the beta of MSN Search powered with its own crawler and algorithm.
Early 2005 is expected to bring another major search-engine flip, once MSN drops Yahoo and switches to its technology.
Amid the turnover of results, Google reinforced its leading position with an initial public offering that brought it $1.7 billion. The Mountain View, Calif., company, almost immediately put its newfound riches to use with the launch of a raft of new services and applications.
The most intriguing was the beta launch of Google Desktop Search because it marks Googles most aggressive push onto users desktops. With the application, users can combine an index of their own files, chats, e-mails and Web browser histories with Googles index of about 8 billion Web pages.
Even before finishing its public offering, Google not only pursued but also tried to one-up its competitors. Take Web-based e-mail, once the domain of Yahoo and MSNs Hotmail. Google decided to give away a huge amount of storage—1GB, to be exact—with its April Gmail beta and ignited a storage and features race.
Next Page: The major trends in search.
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Clearly, the war to win the hearts and minds of Web searchers has only just begun. Heres a look at three of the major trends that emerged from the events in search in 2004:
Targeting: Search became much more than Web-page results this year as the major engines attempted to stretch their reach into more targeted areas, from images and news to local and shopping results.
Local emerged as an area with perhaps the most potential for hyper-growth, if the users and advertisers follow the hype. Google, Yahoo and Ask Jeeves all launched geographically targeted sections of their search services, which tie together business directory and Web data in various ways.
On the search engines heels are major phonebook companies. Verizon SuperPages.com launched a more aggressive local search service, while SBC Communications Inc. and BellSouth Corp. joined forces to reinvigorate their online efforts through the acquisition of YellowPages.com Inc.
Staying relevant: As the amount of information grows, returning relevant search results becomes more difficult for search engines. Experimentation grew throughout the year as search engines strive to create customized card catalogs for users.
Personalization became a watchword. MyJeeves, My Yahoo for Search and an Amazon.com offshoot, A9.com Inc., were among the early services basing results on past searches and user behavior.
But desktop search also began playing a role in better relevancy. The more users can find personal files and e-mails, and pair them with data on the Web, the more pertinent the results will be. Google already dove in, while MSN and Ask Jeeves plan desktop launches by years end. Even Yahoo, whose strength is the Web not the PC, said it has desktop plans in the work.
Staying relevant also requires that the search engines consider new approaches to retrieving results. Upstarts in particular began focusing on creating dynamic categories through clustering (Google even started talking about a similar approach), while startup Blinkx Inc. started returning search results based on the context of what a user is doing rather than keywords.
Making money:Whether they are expanding services to better target users or make results more relevant, search engines had one goal in mind—making more money. Search grew into its own profitwise thanks to the rapid rise of search-based advertising programs.
Yahoos Overture Services and Googles AdWords, among others, deliver targeted sponsored links based on a search term or the context of the content on a Web page. Advertisers bid for the top paid spots and pay based on the clicks on their links.
Google alone relies on advertising for more than 90 percent of its revenues. To continue to meet advertiser demand and keep the profits flowing, it had to expand the number of times pay-per-click ads can appear. More Web searches help in a big way, whether they originate on google.com, through a desktop application or through partners.
Ultimately, grabbing a greater share of advertisers dollars is what the Web search wars are all about.