Yahoo! set to dump Google

6 Jan 2004

The gloves are off in what could be a major battle of the portals with Yahoo! rumoured to be close to dumping Google as its main search engine within the coming months. Google continues to become a serious rival to Yahoo! as a portal in its own right.

It is understood that Yahoo!, which has a shareholding in IPO-tipped Google, is considering switching to its own technology as early as the first quarter. Following a major acquisition spree last year, Yahoo! now has its own search engine technology as a result of its purchase of Inktomi. The dealmaking also saw Yahoo! acquire the consumer businesses of FAST and online advertising and content giant Overture, which is in the process of creating 250 administration, marketing and sales jobs in Dublin.

Yahoo!’s acquisition of Overture and Inktomi has positioned it for a head-on fight with Google for domination in the internet search and advertising business. Overture is widely credited with devising the ‘sponsored search’ model of online advertising, selling businesses the right to advertise on pages that return search results on sites such as Yahoo!.

Over the past year Google has been developing its content search services to tally in with the ‘sponsored search’ element of the online advertising business. As the purveyor of Adwords, Google has become Overture’s most formidable competitor in the ‘sponsored search’ space. After three steady years of marked decline the online advertising business is understood to be projecting major growth this year.

Interestingly, Google last year also revealed plans to locate its European headquarters in Dublin, placing the Irish capital in the front line of a potential battle of the portals.

In related news, Google is understood to have appointed Goldman Sachs and Morgan Stanley to handle its forthcoming IPO for which a date has yet to be set. Google will join online CRM player, which is also pursuing an IPO, in what could be a return to vogue of dotcom stocks.

By John Kennedy