Microsoft, AOL, Yahoo! Search for Answers

With competitor Yahoo! acquiring its suppliers, outsiders have understood that Microsoft would be developing its own search infrastructure.

Meanwhile, a separate announcement indicated that major portals aren't necessarily averse to employing technology used by potential rivals. AOL Time Warner's America Online said Tuesday it was expanding its relationship with the privately held Google -- operator of both a search engine prized for the relevancy of its results and a pay-per-click advertising service. Though Google doesn't disclose its financial results, Google is clearly Overture's biggest competitor in the pay-per-click listings business.

Google -- which operates beta versions of a shopping search engine and a news service -- could conceivably build upon these services to become a full-featured portal, just the way Yahoo! once did. But that potential threat doesn't seem to have driven AOL away.

Danny Sullivan, editor of SearchEngineWatch.com, sees the AOL decision as part of what the company has always done: partnering with outsiders. Microsoft's decision, which appears to be based on the company's concerns about relevant search results, appears to indicate a long-term interest in providing the best experience for the user over a short-term focus on making as much money as possible from its search.

Others speculated, however, that Microsoft could end up acquiring LookSmart on the cheap, or hiring LookSmart staff to beef up its own search engine efforts.

Finally, Yahoo!'s acquisition of Overture illustrates how the uncertainty of the search engine business continues. Overture had long prided itself on its independence, but now that it's under Yahoo!'s wing, Microsoft is expected to eventually cut its relationship with Overture. Yahoo! and Overture say they've planned for such an eventuality, but Overture's new status makes its ultimate business model unclear.

>To order reprints of this article, click here: Reprints