Yahoo drops Inktomi search engine for Google

Web surfers using Yahoo's search function may not know it, but different technology will be powering their searches from next month - a Google rather than an Inktomi search engine.

Yahoo said it chose Google to replace Inktomi because of its extra range and better ranking of web pages. The number of search queries is expected to triple following the switch of technology.

The new engine is said to span 70 per cent of all websites. It searches among 512 million web pages, making it the web's largest, and also returns results from 500 million partially indexed web addresses, giving it a reach of more than one billion documents. Inktomi disputes claims that Google has a wider reach, saying it indexes about 500 million pages and has a reach of 1.2 billion documents.

Google's search services use a technique called link analysis to evaluate the relevance of web pages based on the number and type of other pages that have connections to a particular site.

The technology is licensed to 76 websites around the world, including Netscape's Netcenter, and will be introduced to Yahoo's search engine over the next 30 days to provide search results that extend beyond Yahoo's human-edited directory.

Jeff Mallett, president and chief operating officer at Yahoo, said in a statement that Google was picked because it had grown rapidly along with web use and has proven popular with web surfers.

There are also similarities between the two companies: Google was formed by a pair of Stanford University students, as was Yahoo, and both have leading Silicon Valley venture capitalist Michael Moritz on their respective boards.

Yahoo's decision delivers a google-y for Inktomi, which also counts America Online, BT and MSN, among its customers. The recent appearance of companies that can provide more relevant searches, such as Google and Direct Hit, has hit Inktomi hard. Last year Lycos also dropped Inktomi in favour of Direct Hit and MSN dropped the firm in favour of AltaVista for nine months before returning to Inktomi.

Despite analyst views that the loss will not have much affect on Inktomi's overall revenue, investors were nonplussed by the news. Inktomi's share price fell by nearly a fifth yesterday, wiping close to $3bn off the search company's market capitalisation.

However, Yahoo, while a high-profile client for Inktomi, accounts for only two per cent of Inktomi's aggregate revenue and the web portal said it plans to use Inktomi's products for Corporate Yahoo, launched yesterday.

Corporate Yahoo targets businesses wishing to customise Yahoo's web products for their own website. It is projected to be worth $200m this year, rising to $1.2bn in 2003, according to the Aberdeen Group. Yahoo said Inktomi is the clear leader in this field because of its ability to access the internet and data within companies.

Dick Pierce, Inktomi's chief operating officer, said: "We've begun a relationship with Yahoo to penetrate the corporate space which gives us the opportunity to not only make up the lost two per cent but go beyond it."