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Search is the gateway and guidepost to the Internet. Over the past five years, the business of search has changed from a model resembling a friendly but very well built lemonade stand to the current state of monolithic but often dysfunctional empires built by and around today’s big three (MSN, Google and Yahoo). With tens of billions of dollars at stake, competition between the big three has turned into an all-out business war, the casualties of which are jobs, cool technologies, and ultimately, the current wild-west atmosphere of the Internet. When the dust settles, finding what you are looking for may be a bit more difficult and expensive. There will likely be a major decrease in search options by this time next year and what does exist will likely cost you, unless you are interested in finding information that has been pre-paid for by the supplier (advertiser) as opposed to the consumer (searcher). Google is likely to retain non-paid listings as a priority but that may change if Google issues public shares through a widely expected spring-time IPO. That, however, is then and this is now. Today’s battle takes place between engineers at Overture and Google, with Overture landing a solid upper-cut in the form of Local Search proficiency. Read more…

Yahoo! is ready to post its third quarter earnings report and stock analysts believe they will show their sixth consecutive profitable quarter (ending Sept. 30, 2003) with earnings above nine cents per share on revenues of $335.7 million. Analysts are already predicting a very strong fourth quarter for Yahoo with First Albany’s Youssef Squali, stating he expects to see Yahoo’s total search revenues jump by over 140% from last year’s numbers. This sudden rise is credited to the relationship between Yahoo and Overture, which is being purchased by Yahoo in the next few months. In Yahoo’s third quarter, Overture accounted for over 20% of Yahoo’s revenues. Yahoo watchers should keep their eyes on MSN in the coming months as MSN is expected to drop Overture search results in the near future in favor of their own paid-placement program which is expected to be announced early in the new year.

Last Monday I received an Email from the Wall St. Journal. Since this is something that doesn’t happen every day, and, since the WSJ has already run the article with a quote from our correspondence, I thought it would be nice to share the email exchange with the world. :)

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The gloves have come off between Overture and Google, (allowing their respective lawyers enough agility to hold on to their pens). Three issues ago we wrote about Google’s great fortune in gaining the search account for Europe’s largest ISP, T-Online from Overture. It seems that T-Online’s multi-year deal with Overture had a back out clause allowing them to dump Overture if Overture was ever bought by a competitor. T-Online considers Yahoo, (soon to be Overture’s new owner) a competitor, and cancelled the deal. In reaction, Overture applied for and was granted an injunction against T-Online, preventing them from replacing Overture results with results from Google. Problem is, T-Online had already replaced Overture with Google on August 7th.

While the deal between Yahoo and Overture has not been fully completed, it is expected to be closed sometime in the last quarter of this year. T-Online, on the other hand, claims to have not received the official injunction yet and will not necessarily comply. According to an IDG News article by Gillian Law, a spokesperson for T-Online said, “We have not received any injunction so far. Once an injunction reaches us, it will be given to our legal department for thorough examination.”

The #1 spot for the keyword “injunction” costs just $0.16 per click through on Overture though one can be sure the real thing has cost them quite a bit more in the European theatre.

The blogger.com interface - very simple to use!If you have yet to hear of blogging then let me warn you now, you will be hearing a lot about it over the next few months.

What is a blog? Here is the answer straight from the pioneers of blogging at Blogger.com:

“A blog is a web page made up of usually short, frequently updated posts that are arranged chronologically like a what’s new page or a journal. The content and purposes of blogs varies greatly from links and commentary about other web sites, to news about a company/person/idea, to diaries, photos, poetry, mini-essays, project updates, even fiction.” Read more…

What will Microsoft do to increase its presence in the search engine industry? For a long time MSN has barely been a going concern in the search engine industry, but now with Google whispering about a ’04 IPO and Yahoo! buying Overture and Inktomi, there doesn’t seem to be many options left for the software giant. Here is some insight from MSN product manager Lisa Gurry:

“Lisa Gurry says the company plans to move aggressively to develop its in-house search expertise while continuing to rely on Yahoo as a supplier. ‘We will make the right investments to stay competitive in this space,’ says Gurry.” (USA Today)

Does “make the right investments” highlight a potential buyout of a known search service? This target has long been debated but the field of potential targets have narrowed considerably if we rule out a major buy of Google or Yahoo! by Microsoft.

“For the record, Gurry says Microsoft is not considering buying Yahoo or Google ‘at this time.’”

Who does that leave? Our money is on an acquisition of Teoma/AskJeeves. Teoma is really the only search engine that I can think of which has demonstrated the potential to innovate and maintain the clean search image that Google so quickly rose from. I suppose, however, that this prediction is a no-brainer since there is really very few to pick from.

Till our next news.
- Ross Dunn

Someone, somewhere is going to write a great business book about the search engine wars of 2003 however, their publishers will likely send it back for a rewrite because business books are not supposed to be more interesting and action packed than a Tom Clancy spy thriller. For a recap of previous events (and if you haven’t been keeping up, you’ll need it), please visit the StepForth search engine news site and check our back issues. By 2004, the search engine world will look very different than it does today, starting with Yahoo. Read more…

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