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Will Yahoo Hold On To AltaVista?
Thu Aug 14, 6:00 PM ET
John Ribeiro, IDG News Service
Yahoo may continue with the AltaVista Web site after it completes
its acquisition of Overture Services, and may use some of AltaVista's
search technologies on its own portal sites, according to an executive
of Sunnyvale, California-based Yahoo. AltaVista, a provider of Web
search services and technology, is currently a business of Overture.
•
Yahoo Buys Overture
•
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•
Yahoo's Paid Services Pay Off
•
Yahoo Shows Off Sleeker Search Engine
•
Yahoo Boosts Broadband With Audio, Video
"We believe that the AltaVista brand is still very strong, and
has come to attract a particular type of user, and it is entirely possible
that we may keep the AltaVista site to serve a particular niche of
users," Phu Hoang, Yahoo's senior vice president for engineering,
told IDG News Service. "I think that there may be opportunity
for us to try (on AltaVista) new search features and new capabilities
that are a little bit on the edge, that we are not yet ready to show
up in the mainstream."
Hoang was in Bangalore Thursday for the formal inauguration of Yahoo's
software development center in India.
Happy Merger?
Yahoo announced in July that it signed a definitive agreement to acquire
Overture of Pasadena, California, which offers paid-search listings,
with syndication through search engines on Web portals (news - web
sites) including Yahoo and Microsoft's MSN.com. Overture sells its
listings by auctioning off search terms to the highest bidder.
"
We saw that search from a business standpoint was very much a commodity
business, and could not bring in much profits," said Hoang. "Overture
was the company that changed that landscape by making search the new
hot thing, because they found a way to allow someone like us to drive
a lot of revenue from search. This came from their ability to have
a marketplace where small merchants can come in and bid for a search
term. It became clear to us that this was a very sustainable business
in search." The proposed acquisition of Overture will give Yahoo
control over a key component of Yahoo's business strategy in search,
said Hoang.
Yahoo expects to expand Overture's pay-for-performance search faster
and more cost effectively in areas such as shopping, travel, and
yellow pages, and to integrate contextual advertising throughout
Yahoo's network, including sports, real estate, and autos. Yahoo
also plans to sell a number of its own products and services, such
as Yahoo Store and Yahoo Web Hosting, to Overture's over 80,000 customers,
according to Hoang. "If you look at Overture's base of advertisers,
these people are small merchants and small-business people, and we
have a number of small-business tools and services that we can sell
to them," said Hoang.
Yahoo's proposed acquisition may, however, make some of Overture's
distribution partners uncomfortable, according to analysts. European
Web access provider T-Online International AG, for instance, dropped
Overture in favor of Google of Mountain View, California, citing
a clause that allowed it to terminate the contract early if Overture
was acquired by a competitor. MSN.com is another key customer of
Overture.
"
We would love to keep MSN, and we aim to keep them, but when we did
the deal with Overture, we did the calculation that we would do the
deal even if the contract with MSN does not continue," Hoang said.
Yahoo will keep Overture as a separate company after the acquisition,
because Overture provides its service to many companies, including
Yahoo's competitors, added Hoang.
Picking Up Pieces
Palo Alto, California-based AltaVista was acquired by Overture in
April of this year. Overture also acquired in April the Web search
unit of Oslo-based Fast Search & Transfer, or FAST, a developer
of enterprise (news - web sites) search and real-time filtering technologies.
After the acquisition of Overture, these search technologies and services
will become the property of Yahoo, which also has its own search engine.
Yahoo acquired Inktomi, a Web search technology provider in Foster
City, California, in December last year.
"
We now have the assets and also the flexibility to provide the user
the best search experience, whatever the (search) platform may be," said
Hoang. "Choosing which of those platforms we will use is something
we are continuing to work through. There are many aspects of a search
engine. It may show up as Web search, or it may show up as news search,
or as product search, or travel search."
FAST has traditionally been very strong in the basic science of crawling
and indexing; AltaVista has been pretty strong in different needs
and features of search, such as multimedia search and clustering
search; while Inktomi has done a good job focusing on relevance,
according to Hoang.
"
They are all really good, nice pieces for us to put together an entire
framework of providing the best search experience to the user," Hoang
added. "What we find is that some of the technologies that we
have work very well for the Web, and others work very well for the
other components. So we are in the process of looking at the various
technologies and mapping that to the various applications that we are
intending to use." Yahoo's own search engine will offer basic
personalization features within a year, Hoang added.
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