This is the story of how internet search began in early days, how it has evolved and how the key players in search industry facilitated this growth of internet search.

Google was founded in year 1997, but before Google dominated the search scene many other search engines were popular on internet like AltaVista, Ask Jeeves (now ask.com), Lycos and of course Yahoo! to name few

Picture of Yahoo Homepage in 1996

Yahoo wasn’t really a search engine but it started off as directory of websites organized in different categories, and all this was maintained by human’s editors who manually browsed the internet and added website in right categories.Since this was manual, it ensured indexing was of high quality as it used human intervention to distinguish between good and bad sites.

However as internet grew Yahoo’s manual method of organizing sites was becoming less efficient and less scalable so they partnered with a third-party “crawler-based” search engine to provide answers for when there are no matches within its own human-powered listings..

Until late 90’s search market was non-lucrative and Web Companies didn’t see enough potential for making big money so stayed away from it.

In late 1990 like other search engines/web directories, Yahoo! diversified into a Web portal. In the late 1990s, Yahoo!, MSN, Lycos, Excite and other Web portals were growing rapidly.
Web portal providers rushed to acquire companies to expand their range of services, in the hope of increasing the time a user stays at their portal.

Thus all of above portals (excluding Google) started loosing focus from search and started concentrating on building portals.

In February 1998, a player in Search market “GoTo.com” (later renamed Overture Services, Inc.) entered the scene and started offering advertiser’s option to bid for keywords for placement of their ads on search results, so the advertisers with highest bid got better placement on search results.This revenue model is called PPC (pay per click) wherein advertisers paid money to search engine for the clicks that were generated to their website from search results.
This program from was highly successful and it’s allowed its partners like MSN and Yahoo to monetize search market.

However GoTo.com model had one drawback, highest bidder got highest placement for keywords, so it didn’t factor into account “relevancy” of website or geographical location from were searches were being made.
Obviously if the site was not relevant, less users would click on the Advertisement and thus resulting in less money going into Search engines coffers.

Google overcame this drawback in 2000 and came up with better search monetizing algorithm with Program named “Adwords”.
As per this program, the ordering of the paid-for listings depends on other advertisers’ bids (PPC) and the “quality score” of all ads shown for a given search. The quality score is calculated by historical click-through rates, relevance of an advertiser’s ad text and keywords, an advertiser’s account history, and other relevance factors as determined by Google.

By 2000 Google as search engine was slowly growing in stature as not only their search results were more relevant, but also much faster compared to competitors.The Google search engine attracted a loyal following among a growing number of Internet users, who liked its simple design and useful results.

Google Homepage in 1998

In 2000 Yahoo dumped Inktomi and started using Google to power their search results and thus helping Google to be more and more popular.Soon people started realizing that they could directly go to Google for their searches instead of going to Google via Yahoo.

By 2002 Yahoo & Google had equal share in search market which was about 30% and Google was slowly taking the search market away from Yahoo.
Yahoo saw Google as threat to its growth and started acquiring companies with search technologies.
In 2002, they bought Inktomi, a “behind the scenes” or OEM search engine provider, whose results are shown on other companies’ websites and powered Yahoo! in its earlier days.
In 2003, they purchased Overture which owned the AlltheWeb and AltaVista search engines. Initially, even though Yahoo! owned multiple search engines, they didn’t use them on the main Yahoo.com website, but kept using Google’s search engine for its results.

In 2003 AOL signed deal with Google which enabled them to not only power their search results but also used them for paid listing on their sites in US and some other countries.

In 2004 Yahoo started powering its own search, but that was too late in the game as by this time Google was leading the search traffic with 35% of share as compared with Yahoo! was 32%

In subsequent years Yahoo kept loosing the search market share to Google. In a desperate attempt to stop slide, towards end of 2006 Yahoo launched a project named Panama.

Yahoo’s Project Panama was designed to catch up with Google’s Ad placement technology.Prior to 2007 Yahoo placed a paid ad solely based on the amount advertisers are willing to pay for the keyword. Post Panama Yahoo Ads placement would be based on price and relevancy of ad.

This again was too little & too late, as by this time Google completely dominated the search market with 45% of share, compared to Yahoo’s 28% market share.

In July 2009 Microsoft and Yahoo announced a deal in which Y! search will be powered by Bing, making Microsoft and Yahoos share of search traffic close to 30% and Google’s share is still 70%.

What happens next only time will tell,but as now search game will be fought 2 powerful players Microsoft and Google, both of them trying to outwit each other in terms of marketing dollars spent as well as technology.

As of when, this post was being written Miscrosoft was running a powerful online marketing campaign to promote its Search Engine Bing. Its offering searcher’s upto 20% cashback on products bought online from partner vendors on sales originating from its search pages.

Here are Important timelines in Search Industry

1994 Yahoo founded.
1994 Lycos founded.
1995 AltaVista founded
1995 Excite
1996 Inktomi
1996 AskJeeves
1997 Google founded.
1998 MSN search
1998 GoTo.com offer advertisers option of bidding to appear at the top of the results in response to specific searches. Bid amount was paid by advertiser to go to overtime searcher clicked on a link to the advertiser’s website.
2000 Google launches adwords
2000 Yahoo begins using Google to power Yahoo search
2003 Yahoo acquires inktomi, goto, altavista and alltheweb
2003 Google launches Adsense
2004 Yahoo begins powering its own search.
2007 Yahoo rolls-out project Panama to bridge gap with Google
2009 Microsoft launches new search engine Bing.
July 2009 Microsoft and Yahoo announced a deal in which y! search powered by bing.
2009 popularity google 70% , Yahoo 26%

• Previous Entry: Funny Tale of Traffic Ticket
• Next Entry: Medical Reform and Health Care System in US