Yahoo to Offer Search to Third Parties

By Reuters  |  Posted 07-10-2008 Print Email
Addition of resale model is latest step for embattled Web firm Yahoo, as it tries to reinvent itself following Microsoft's hostile takeover attempt.

Yahoo will let customers, academics and even rivals build customized Web search services on top of its own technology, introducing a resale model into a major Internet market where it ranks a distant No. 2 to Google.

In the embattled Internet company's biggest step yet to carve out a more distinctive strategy in the Web search market, Yahoo said on Wednesday it is introducing a new strategy it calls "Build your Own Search Service" (BOSS).

In addition to deep access developers get to create their own text-link search services, Yahoo is also unlocking its image and news databases to let outsiders create their own permutations of Yahoo News, or Flickr, its photo-sharing site. Yahoo would even supply spell-checking services to partners.

Yahoo is fighting to remain independent in the face of a challenge by dissident investors seeking to dump its management and board in order to reopen talks with Microsoft on a merger to form an Internet giant to compete with Google.

The move highlights Yahoo's own ambition to continue to compete against Google even as it partners with its crosstown rival in a related market.

Last month, Google and Yahoo reached a deal in which Yahoo will let Google sell a portion of the Web advertising that runs alongside Yahoo's own search results.

Yahoo estimates that for start-ups to develop new search technologies and run that across the entire Web takes a minimum capital investment of $300 million in terms of hardware, networks, data, coding and expertise.

"We want to disrupt the search market by removing that entry barrier and make room for more players and more ideas," Prabhakar Raghavan, the chief strategist for Yahoo Search, said in a phone interview.

Were Yahoo's search services to be embraced by new start-ups, Yahoo envisions a scenario in which its market share might remain steady but its resale partners and developers would explode, taking share from rival Google.

Based on recent industry data, Google had a 62 percent share of the U.S. Web search market.

Raghavan envisions over time seeing that share sink below 50 percent, while Yahoo's own share, now at 21 percent, might more than double through its resale partnership strategy.

Yahoo is seeking to make its search technology the underlying engine for the next generation of search services, borrowing a tactic familiar in the mobile phone industry, where established operators rent out spare network access to Virgin Mobile, for example, which owns no capacity of their own.


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