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Inktomi Revs Up Its Search Engine Technology

A new technology from Inktomi automates tasks involved in compiling a Web directory.

SAN FRANCISCO -- In an effort to maintain its edge in the crowded search-engine market, Inktomi (INKT) unveiled Tuesday a search engine based on the company's new "concept induction" technology, which automates the task of compiling Web directories.

Inktomi declined to talk about specific revenue figures, but said it would charge a small per-search fee to sites using the search directory engine, as it has with its previous products. Analysts expect the new product will significantly add to the company's bottom line.

"It accelerates them ahead of the competition by a generation," says Martin Marshall, a director at

Zona Research

. "I would expect to see something on the order of a 25%

a year increase in overall revenues."

Over the last few months, the search engine industry has grown increasingly competitive as new companies develop more sophisticated ways to connect people with content. In February,

Direct Hit

ousted Inktomi from

Lycos'

(LCOS)

HotBot

site as its main search service. Inktomi's new technology and engine, coupled with AOL's selection on Monday of Inktomi as its search engine of choice for future products, suggests that Inktomi continues to find new ways to stay ahead of the pullulating pack.

"They're like the horse that's one-and-half lengths ahead of the field," says Marshall. "They can't stand still."

Concept induction, which Inktomi has been developing for 18 months, aims to make searches more efficient by returning not just Web pages, but a list of related categories. It also determines which of the culled pages are more popular, and therefore, more likely to be useful.

In contrast to previous product launches, Inktomi's new directory engine has been slow to attract business from the bigger Web portals -- many of which employ teams of surfers to compile their own Web directories. Out of more than 30 of Inktomi's current search-engine customers, including

Yahoo!

(YHOO)

and

TheStreet Recommends

Snap.com

, only a handful of smaller ones are signing up, including

Aeneid

,

VerticalNet

,

GoProfit.com

and

GoNow.com

. But both analysts and Inktomi expect to announce bigger customers in the coming weeks.

Typically, search engines such as

Infoseek

(SEEK)

and

AltaVista

find relevant Web sites by employing spider-like technologies that crawl the Web and retrieve Web pages. The other major approach to search, known as indexing, was developed by Yahoo! and uses a more human-driven directory approach in which its surfing team of editors, or Yahoos, find and index the best Web sites in given categories.

But since the emergence of portals last year, which organize the chaos of the Web by dividing it up into index-like categories, the differences between the directory and spider approaches have been disappearing. The introduction of the directory engine suggests portals will continue to combine both methods to form a hybrid approach.

Yahoo!, the Web's most popular search service, already uses a directory approach. Inktomi executives insist the directory engine is not designed to replace or compete with Yahoo! On the contrary, they say, it will help Yahoo! find more and better sites by leveraging the work of surfing Yahoos.

"Our goal is not to take the human element out but to leverage the amount of knowledge that a small number of people can generate," says Paul Gauthier, Inktomi's chief technology officer. "If Yahoo! has more humans to leverage, they can get more out of this technology."