January 12, 2004 4:00 AM PST
Designs on desktop search
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Net titans Microsoft, Yahoo and EarthLink are all considering broadening their lucrative search businesses by providing access to online searches through a "taskbar" displayed to the side or at the bottom of a PC screen, according to people familiar with the plans.
Taskbar search tools are similar to popular toolbar applications that have long been available as browser add-ons, but there is an important difference: They reside in the system tray in Microsoft's Windows operating system, allowing queries independently of the browser or any other applications running on the desktop.
Major Web portals are considering broadening their search businesses by providing access to online queries through a "taskbar" displayed to the side or at the bottom of a PC screen.
Staking out a place on the desktop could become increasingly important for Microsoft rivals, as the software giant begins to flex its search muscles.
"It's a product line that's captured everyone's attention, because it can put the most important functionality at people's fingertips," said Scott Mecredy, senior product manager for core software at EarthLink. "It gives you the ability to aggregate the features and functionality people want, such as searching various Web sites and content sources."
Developments in search taskbars are important, because they signal a new direction for Internet search: It isn't exclusively the domain of Internet browsers, anymore.
Internet search is breaking out of the browser, as ordinary desktop applications like Microsoft's Word take on Web-like functions, with the advance of data standards--such as the Extensible Markup Language--that promise to blur the line between online and offline activities.
Already, as many as three-fourths of the Internet population access the Web through nonbrowser applications, according to research firm Nielsen/NetRatings. Why launch a Web browser when you don't have to?
Google was among the first major search providers to introduce a taskbar application that bypasses the browser.
The deskbar follows Google's earlier development of a browser plug-in for Internet Explorer, placing a search bar in the browser menu.
Follow the leader
Search experts said both tools quickly inspired me-too efforts from Yahoo and others.
"Everyone seems to be in complete copycat mode now," said Danny Sullivan, editor of Search Engine Watch, which tracks industry happenings.
As companies like Google and Yahoo eye the desktop for new growth, they are playing into the hands of a formidable rival: Microsoft.
Microsoft has already outlined designs to put search onto the desktop, aggregating a point of research for its operating system and various applications, including Word, e-mail and MSN Internet.
Those moves pose a considerable challenge for competitors that must vie for attention on Microsoft's home turf of Windows.
Microsoft monopolizes the desktop with its Windows operating system and family of Office utilities, including Microsoft Outlook, Word and Excel. Its search plans go beyond what industry rivals can do, because it ultimately will let people search the OS, applications and the Web. With its upcoming Longhorn software, it plans to let people conduct Google-like searches on their hard drives or categorize query results in different ways intended to make the data easier to digest.
To this end, it has signed partnerships with information resource company Factiva to help its customers retrieve data from multiple sources on Microsoft Office.
In addition, Microsoft dominates the Web browser market with Internet Explorer. With this influence, the company can point people to its search technology by default--and has long done so--unless users opt for another provider.
Microsoft plans to make search a greater part of its Internet applications. Microsoft product manager Lisa Gurry said last week that the software giant plans to introduce new search technology this year, which will be featured in the Windows Media Player, for example.
She added that a desktop search application is an "interesting area of development and is something Microsoft is looking at." She indicated that the company would have news in two months related to the technology.
Digging for dollars
Search is an attractive business opportunity for application makers. When people conduct a search, they often will see a list of free and sponsored search results. Application makers make money from advertisers each time someone clicks on a paid link. Revenue from paid search buoyed online advertising last year, growing by more than 25 percent to $1.6 billion. Many Internet service providers and application makers want to take advantage of the expected growth in 2004 to $2 billion by giving people new ways to search and advertisers new ways to reach customers.
Google, Yahoo and others are eager to protect their stranglehold on the Web market, by expanding their tools in other applications. Google, for example, has a deal with Apple Computer to be the default search provider within its Safari browser, and the company has forged multiple partnerships in the mobile phone market.
If the companies don't develop new applications, they risk losing out.
"Search, especially shopping search technology, is becoming extremely important in the online commerce world," said Abha Bhagat, senior analyst at Nielsen/NetRatings. "As more consumers begin their shopping through search engines or portals, they do risk losing users, if they don't have this type of integration."
Search and destroy
Microsoft's path to expand
the Windows empire is leading
directly to search king Google.
EarthLink, the third largest ISP, is looking at desktop and toolbar search as a way to help it stand out in its fiercely competitive market. It has talked to all the desktop search providers about a partnership to offer such a service to subscribers, according to Mecredy. Without EarthLink naming names, those providers could include Google, Yahoo, advertising software maker WhenU, and search technology providers Groxis and Dave's Quick Search Deskbar.
"We have plans to launch something along this line this year," Mecredy said.
One Internet search executive, who asked to remain anonymous, said Yahoo-owned Overture Services, too, has been bidding for business in the desktop search arena--with Internet service providers, including EarthLink.
EarthLink would not comment on specific talks, but Mecredy said it has spoken to all the major technology players about partnerships for a desktop search application and/or a toolbar plug-in for search. The ISP already offers subscribers a toolbar for blocking annoying pop-up advertisements, but it does not yet include search.
For Overture, regaining EarthLink as a search partner in desktop or toolbar technology would likely be a strategic win. The company lost a deal to provide commercial search results to EarthLink in 2002, when it was usurped by Google and its growing commercial search network.
EarthLink said it is "keenly aware" of what Google is doing in desktop search and toolbar applications because of its partnership with the company for algorithmic and paid search. But the company has not yet decided whether it will partner with a third party or develop software on its own.
Overture spokeswoman Dina Freeman described deskbars and toolbars as "an area of the industry that everyone is looking into," but the company has not announced a product.
Search is everywhere
Yahoo, which bought Overture last year for about $1.7 billion, has already demonstrated its commitment to expanding search in other areas. Yahoo CEO Terry Semel last week said that the company has "only just begun" its grand plans to grow its Web search business, earmarking 2004 as a year when search will become omnipresent throughout its family of sites.
Yahoo has already incorporated search into its Instant Messenger application. Using Yahoo IM, people can hold a conversation while searching for information on movies or weather in the same chat box.
Groxis, a technology start-up that uses graphics to display Web search results, is a viable partner for many of the ISPs or Web portals for desktop search. Groxis sells search software that sits on the desktop; it simultaneously queries the databases of six search engines--including Yahoo, MSN and Teoma--and visually organizes the information into categories so that users can pinpoint what they're looking for.
R.J. Pittman, CEO of Groxis, said the company has received inquiries from the major search players about its software. Groxis is also exploring the development of a version of its desktop search application that can be branded by third parties, Pittman said. So, ultimately, companies such as Yahoo or Citysearch.com could license the desktop tool to search their network of sites within one piece of software on the desktop.
"It's a great opportunity for ISPs, and they're all looking for competitive-edge features that will help them stand out," Pittman said.