Yahoo, IBM challenge Google with search software

IBMCorp. and Yahoo Inc. are teaming up to offer a free data-search tool for businesses, astrategic move challenging Google Inc. and other corporate-search specialists in a blossoming market.

IBM already sells a business-focused search product, OmniFind, that lets organizations comb through internal documents. This free new edition of OmniFind will be limited in the number of documents it can query, but will combine the results with web searches powered by Yahoo.

IBM hopes the service, being announced Wednesday, bolsters its overall efforts to improve dealings with small companies.

More broadly, though, Yahoo and IBM expect their partnership to shake up the field of "enterprise search," in which leading providers such as Google, Autonomy Corp. and Norway-based FAST are seeing forays from business software giants such as Microsoft Corp., Oracle Corp. and SAP AG.

Google has been dominant at the lower end of the market selling "search appliances" that begin at $2,000 USand range up to $30,000. The top-of-the-line version can comb through 500,000 documents. Not coincidentally, that is the same limit IBM and Yahoo have set for their free software, though Google's product includes hardware that operates the search service.

"They're going to create a real headache for Google at that tier," said Forrester Research analyst Matthew Brown.

Of course, whatever pain Google feels ought to be put in context it gets 99 per cent of its revenue from advertising, not from selling search appliances.

While Yahoo and IBM may eventually expand their partnership, Yahoo will focus on the web-search aspect of the equation and not venture into enterprise search, said Eckart Walther, Yahoo's vice-president of product management for search. That would be in keeping with Yahoo's recent pledge to stay focused on its consumer audience and advertising network, a step aimed at resolving internal strife over a muddled strategy.

Indeed, Forrester's analystBrown said it appears that Yahoo is most interested in using the IBM deal to strengthen its brand in corporate environments and get people using the Yahoo web search at work more often.