Google, Yahoo! Revving Up Search Engines

Google Inc. (search) and Yahoo! Inc. (YHOO) are revving up their online search engines as the once-friendly business partners shift gears and prepare for what promises to be a fierce rivalry.

Google unveiled an even more powerful version of its leading search engine with the addition of 1 billion additional pages to its Web index, increasing its breadth by about one-third. Google's engine, the most popular on the Web, now spans 4.28 billion Web pages, up from 3.3 billion pages earlier this week.

By rolling out its expanded search engine early Tuesday, Google stole some thunder from Yahoo, which announced Wednesday that it's ready to run its search engine without Google's help.

Yahoo, based in Sunnyvale, Calif., has been licensing results from Google's search engine since June 2000, helping to establish Google as the king of online search.

But Yahoo has long viewed Google, based in Mountain View, Calif., as a competitive threat and last year spent more than $2 billion on acquisitions to acquire more of the technology that it needed to run on its own search engine. Yahoo last month disclosed it would sever ties with Google before April, so Wednesday's announcement isn't a surprise.

Phasing out Google will take several weeks, said Jeff Weiner, Yahoo's senior vice president of search and marketplace. Once the transition is complete, Yahoo expects its search engine to be far more comprehensive than it was while it was being fed by Google, Weiner said.

Yahoo isn't disclosing how many Web pages will be indexed by its new search engine.

Losing Yahoo as a customer won't have a significant effect on Google's finances, said Sergey Brin, Google's co-founder and president of technology.

Privately held Google doesn't disclose its financial results, but its annual revenue is believed to range between $700 million and $1 billion. Yahoo reported $1.6 billion in revenue last year.

Online search engines have become prized assets during the past few years as they have developed the tools to better connect advertisers with prospective buyers — a skill that has turned into a big moneymaker.

The battle for search supremacy has drawn the firepower of another formidable combatant — software giant Microsoft Corp. (MSFT), which is spending millions to develop its own tools for combing the Web. For now, Microsoft's MSN site is relying upon Yahoo's search technology.

Google has built a sizable lead in online search since Brin and partner Larry Page developed a new way to guide Web surfers to their desired Internet destinations while they were Stanford University graduate students.

Google's Web sites handled 35 percent of all Web searches in December, compared with 27 percent at Yahoo sites and 15 percent for Microsoft sites, according to the latest data compiled by comScore Media Metrix, a research firm. AOL and other Web sites owned by Time Warner have a 16 percent share. Those sites largely rely on Google for their search results.

Even with its expanded reach, Google still isn't close to capturing the constantly expanding constellation of online content. By some estimates, there are 10 billion pages on the Web.

In its latest makeover, Google also tweaked the closely guarded formula that determines which Web sites are most relevant to a search request.

Google has made five significant changes to its algorithmic formulas in the last two weeks, Brin said.

Google has been regularly upgrading its search engine since its late 1998 debut with a Web index of 25 million pages, but the potential threats from Yahoo and Microsoft have added more urgency.

"We have decided to put even more energy into our improvements and have turned up the notch on innovation a bit," Brin said.