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Yahoo! reaping profits from search engine

As Yahoo! struggled to lift itself out of the dot-com slump a few years ago, it faced a big decision.

Google was dazzling the world of Internet search engines with its building of a massive index of Web documents. Yahoo! had neither its own search engine nor a way to fully reap the profits from Internet searching.

Today, Internet searching has become a cornerstone of Yahoo!'s resurgence from the dot-com slump. Yahoo!'s search-engine advertising revenue of $1.2 billion last year accounted for 58 percent of all ad revenue and 45 percent of the company's total net revenue.

While Google's name is still synonymous with search, many consider Yahoo!'s search technology to be at least as good as anybody's. U.S. Internet users went to Yahoo! for 31 percent of their search queries in February, according to comScore Networks. Google captured 36 percent.

Meanwhile, Overture's system of matching ads to search-engine results was taking off as advertisers found it effective and cheap to target text ads to specific search queries.

Yahoo! can hardly afford to rest on its laurels. The search industry is evolving rapidly beyond just ordinary Web search. Desktop search, video and image search, and the ability to find local businesses are all must-haves for a search engine today. Weiner envisions Yahoo!'s 165 million registered users — with the help of Yahoo! tools — vastly expanding the amount of information they share with each other through the Web.

"We have only scratched the surface," he said. "You get into the potential of hundreds of trillions of documents. That's the vision — to enable people to find, use, share and expand all human knowledge. Not simply organize what already exists."

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