Search: Looking for a winner
Google went public and set the pace for rivals in 2004, in a fierce battle to own Web search. Internet portals Yahoo, Microsoft and America Online fought tooth and nail to overtake its lead--but without success, while throngs of newcomers claimed to be the next search star.
Search-related marketing continued to push the online advertising turnaround, with record sales of as much as $3.6 billion, or about 40 percent of the estimated $9.1 billion total market, according to research firm eMarketer. Still, threats to paid search, including click fraud, trademark disputes and warnings of slower growth ahead loomed over the industry.
The year began with Yahoo's emancipation from longtime search partner Google, in what was the official start to a closely matched technology contest. Yahoo ended its three-year reliance on Google technology by installing its own proprietary search brew and began broadening its index.
Yahoo also made several strategic search acquisitions, including Kelkoo, Oddpost and Stata Labs; launched local and personalized search sites; and began testing a digital video search engine to launch in 2005. Also early next year, it plans to unveil desktop search technology.
Google mania racked the industry with months of speculation about the company's highly secretive public offering. The company, which filed to raise $2.7 billion, shook up Wall Street with an unorthodox auction-style public offering that caused institutional investors to worry about losing valuable fees and a traditional "bump" on the first day of trading. Doubts plagued the IPO before its opening day, but in the end, Google raised nearly $1.7 billion and enriched insiders, investors and Wall Street.
With its war chest and online ad revenue pouring in, Google continued innovating. It launched a social networking site; a free e-mail service; desktop search software; a personalized search engine; and a broad book-indexing project with major libraries. Next year, it plans a digital-video search engine, according to sources.
Microsoft, the 800-pound gorilla in the search game, made a late-in-the-year splash with desktop search technology that links Outlook e-mail, PC files and the Web into one searchable repository. Otherwise, it began testing new Web search technology but continued to license software and advertisements from rival Yahoo for its public search engine. Expect the software giant to gain independence in 2005.
The year also was marked by a raft of search upstarts aiming to challenge Google. Most notably, Amazon.com threw its weight in the market by launching A9.com, a personalization search engine. AOL, which uses Google's technology, tapped into its parent company for content to improve searching capabilities. And tech bigwigs such as Apple Computer and IBM took a bite out of the industry.
Ask Jeeves also kept pace with desktop search technology, personalization features and a $343 million acquisition of iWon.
In 2005, the search stalwarts will likely take the wraps off even more new technology for finding your heart's desire online, as well as perfect products for personalization, desktop and local search that are already being tested.