Google vs. Yahoo!: Even More Competition

Microsoft isn't Google's only competitor. From the beginning, Google's chief competitor in the search field has been Yahoo! Not only was Yahoo! a more established search site, it also was the first search engine to expand into a full-featured portal with topic-focused vertical sitessomething that Google is just now in the process of doing.

Of course, Google has already bested Yahoo! in terms of search index size and number of users. It's easy to see why, in retrospect; Google's incessant focus on search (and only search), along with the company's dedication to a clean interface and simple search experience, tapped into what the market wanted. People didn't want their search cluttered with all sorts of subsidiary nonsense; Yahoo! may have offered more non-search services, but Google did search better.

Today, Yahoo! remains a strong competitor in the search market, having improved its search effectiveness in recent years. Most endusers today don't realize that Yahoo! actually started as a directory, and only added a true search index with the acquisition of the Inktomi, Overture, AltaVista, and Fast search engines in 2003-2004. Yahoo! search still isn't as big or as targeted as Google search, but it's not half-badand Yahoo! still has millions of loyal users.

Even more important, Yahoo! is becoming a strong competitor to Google in its core Internet advertising business. In May, 2006, Yahoo! signed with eBay to become the exclusive third-party provider of graphic ads on eBay's auction site. Yahoo! also agreed to use eBay's PayPal payment system throughout its network of sites, and to co-develop "click-to-call" advertising technology. (With click-to-call, consumers can click an ad to place a phone call to an advertiser, using Internet phone technology supplied by eBay's Skype subsidiary.)

With both Microsoft and Yahoo! coming after Google's advertising cash cow, competition is heating up.