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Market for paid inclusion search to reach $6 billion

February 2, 2004

Innovation among companies hots up as ad pie swells.

With experts projecting that the global market for paid Internet searches will reach more than US$6 billion (S$10 billion) by 2006, up from about US$2 billion last year, search engine companies are gearing up to duke it out for a chunk of the advertising pie.

Mr Sterling, program director at strategic research firm The Kelsey Group, senses a war brewing on the Internet.

Recent news reports have described the efforts of IT giants Yahoo! and Microsoft to gain a foothold in the market.

Both are trying to come up with next-generation search technologies to elbow past the current leader, Google, which now processes 80 per cent of all Internet searches.

Yahoo!, which now uses Google's search technology, announced plans this month to ditch its partner in favour of technologies developed by Inktomi and Overture, companies recently bought by Yahoo!

Yahoo! is now free to challenge its former ally. In the Microsoft camp, rumours about the software behemoth developing a 'Google killer' were confirmed when a spokesman recently admitted that the company was developing its own search engine.

There have also been reports that Microsoft will integrate its search engine into the next version of its Windows operating system and Office productivity suite.

With Google planning a public offering worth an estimated US$4 billion, you can be sure it will not give up its crown so easily.

Mr Sterling told The Sunday Times that search engine innovation will probably go into overdrive - good news for consumers.

'The level of competition and research and development in the search marketplace will offer users and consumers more options and better relevance,' he said.

We asked three US-based experts how search engines might evolve this year.

Search engines will get better at organising your search results. Mr Timothy Hickernell, vice-president of technology research services at IT research firm META Group, said that companies such as Vivisimo are enabling search engines to file results into neat categories to narrow down searches.

Vivisimo renders categories on the fly, depending on the database you're searching.

For example, if you want to search Apple's website for 'MP3', your results may be put into categories like 'iPod', 'Music Store' and 'File Downloads'.

So, you want to know where to stay while on a holiday in Paris? Type in 'Paris Hotel' in a search engine now, and you're likely to face a list of online reservation services which give little information about the hotels.

Mr David Sullivan, editor of Searchenginewatch.com, said that search engines are looking into something called invisible tabs - specialised categories that you can click on to narrow and increase the relevance of searches. In this example, the search engine will assume you are looking for hotel information rather than online reservation services.

So the engine will automatically use its 'hotel websites' tab for your query.

If you are looking for an Italian restaurant, a localised search engine would be able to restrict your results within your zipcode.

Google and Overture have already demonstrated their versions of the local search engine. If it catches on, Mr Sterling estimates extra revenues from local advertisers could reach US$2.5 billion by 2008.

You have a song in your head, but you have no idea what the title is or who sang it.

Mr Hickernell believes search engines will soon be able to help you find the information you are looking for by just typing in snatches of the song.

Typing in the lyrics 'I'm going to Wichita' will bring up websites where you can buy Elephant, the latest album by alt rockers The White Stripes.

You love reading in-depth reviews of the latest tech gadgets, but every time you do a search of 'gadget review', you end up with websites of online retailers.

Mr Sterling said companies are looking into ways to allow search engines to personalise results.

He pointed out that search engine Eurekster recently launched a personalised search engine that 'learns from user behaviour and enlists social networks to help refine search results'.

It takes note of websites that you view for more than a minute. So the next time you do a search for 'gadget reviews', it will show you results that are found only in IT magazines.

Source: Straight Times Asia

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