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Hello Google; Au Revoir Inktomi

Yahoo is replacing the Inktomi search engine with Google, but is the change permanent?

By Stuart J. Johnston, PCWorld   

Still, the stock markets didn't see it that way. While Inktomi executives said Yahoo's business only represents 2 percent of the company's income, the company's stock took a $25 hit, falling 18 percent to $115 by the close of business.

What does the change mean for users?

"Slightly faster searches in a slightly wider area," quips Martin Marshall, a managing director at Web analysis firm Zona Research in Redwood City, California. Indeed, Google's index of more than one billion URLs enables users to search the equivalent of a 70-mile-high stack of paper in less than half a second, according to Google executives.

But the combat among search-engine providers has developed into one of slight advantages exploited, and it may have less impact on consumers than is immediately apparent. Ultimately, it may be more about costs than technological superiority.

Indeed, while Google's search engine currently provides faster and wider results than Inktomi's engine, the real benefit may be to Yahoo's bottom line. Zona's Marshall compares Google, whose founders started out as Stanford University Ph.D. candidates, to Advanced Micro Devices in the race with Intel for mindshare in the microprocessor arena. Intel has stronger branding and name recognition for its CPUs, so AMD's chips have to be faster and cheaper in order to compete effectively.

"If it's that kind of an undercut, then Inktomi may come back with some cheaper business," says Marshall.

That means that Google is still vulnerable in the long term as Inktomi's engine improves.

"We're into an era of commoditization of search engines," adds Marshall. Meanwhile, Inktomi retains other major accounts such as America Online, Excite@Home, and Microsoft Network.

Yahoo plans to add the Google search engine to its portal within the next 30 days.