Yahoo Upgrades Online Search Engine
Yahoo Inc. has retooled its online search engine to make it more helpful and engaging, joining an industrywide wave of improvements that so far haven't dented Google Inc.'s dominance.
The Sunnyvale-based company regards the upgrade to be announced Tuesday as the most significant change to its search engine since it reclaimed control of the underlying technology nearly 3 1/2 years ago.
If nothing else, the improved search engine should boost Yahoo's employee morale because it backs up co-founder Jerry Yang's vow to re-establish the company's reputation as an Internet innovator, said Standard & Poor's equity analyst Scott Kessler.
Yang returned to the company and replaced Yahoo Chairman Terry Semel as chief executive in June.
"Is this (upgrade) going to be very important in terms of market share? I'm not so sure. But it probably will help them in terms of mind share," Kessler said. "One of the reasons that Google has captured the imaginations of so many people is they have been doing so many different and interesting things."
Between June 2000 and May 2004, Yahoo relied on Google to power its search engine -- a decision that helped transform its once-smaller rival into a juggernaut that now fields more than half of the search requests on the Web.
As part of its makeover, Yahoo will suggest ways to phrase a search request as a user types into the query box, it will provide a list of related concepts and it will produce more links to photos, videos and music on the main results page.
The search engine also will pull information from Yahoo's calendar service, Upcoming.org, to highlight local events when they're relevant to a request.
Many of Yahoo's new features are similar to improvements that Google and Ask.com introduced during the spring and Microsoft Corp. matched just last week.
The lag makes it seem like Yahoo is simply trying to catch up to the rest of the pack instead of taking the next technological leap ahead in search, said Jim Lanzone, who runs Ask.com for InterActiveCorp.
"We are already looking ahead to our next improvements," Lanzone said. "Search is such an unsolved problem that it requires constant innovation to satisfy users. And the more search delivers, the more the users expect."
Yahoo believes its approach is more comprehensive than its rivals' in several key areas, including music, movies and photos.
For example, by drawing upon the vast library stored in its popular Flickr service, Yahoo has built an image index much larger than any of its rivals, said Vish Makhijani, the company's senior vice president of search.
"Our goal is to be best-of-breed in certain categories," he said.
Yahoo is hoping the changes will lure back Web surfers who defected to Google.
Although its search engine ranks second in usage, Yahoo has been steadily losing ground -- a distressing pattern that has contributed to the company's sagging profits and stock price.
In August, Yahoo had a 23 percent share of the U.S. search market compared with 56.5 percent for Google, according to the most recent data from comScore Media Metrix. At the beginning of 2005, Yahoo's market share stood at 32 percent, just slightly behind Google at 35 percent, based on different measurement techniques used at that time by Media Metrix.
Even a small gain in search market share figures to help boost Yahoo's profits because the company already has introduced a system for displaying ads relevant to search requests that executives say has spurred more commission-generating clicks on text-based ad links.
The success of this new commercial approach, dubbed "Panama," indicates Yahoo could make more money if people use its search engine more frequently.
Makhijani said he could feel a more positive vibe emerging as Yahoo's engineers developed the new search tools during the past nine months.
"Our sense of confidence is greater because of all the work we have put in on the new platform," he said. "The proof will be in the pudding, but we think we can bring a fundamental change to the Web search experience."