Last week, Yahoo! (NASDAQ:YHOO) launched the beta version of its new real-time Instant Search -- in response to ongoing fierce competition in the Internet search arena.
Will it tilt the tables in any substantive way? Let's take a look.
Here's how it works: As you begin typing in your search word, title, name, or phrase, Yahoo!'s newest offspring begins delivering answers based on the information you've given it thus far. It mimics intelligence, since it is basically guessing what you want in real time, giving you result after result, and getting closer to the desired answer with every key stroke it's fed.
The interface in this beta version is simple and contains no ads. You see a basic box and the links and descriptions pop up, each replacing the one before it, as you zoom in on the specific result you are seeking. The company says results are based on terms commonly searched by all Yahoo! users.
To pull off Instant Search, the Yahoo! team used a new method of programming called AJAX, which enables designers to route out the usual back-and-forth action between servers in traditional Web applications. This allows for quick turnaround and, well, instant search.
But AJAX isn't exclusive to Yahoo!. And in the search world, a technology edge typically evaporates quickly. Google (NASDAQ:GOOG) used AJAX for its mapping services, which have become incredibly popular. And Microsoft (NASDAQ:MSFT) has expertise in it, as well. Innovations similar to Yahoo! Instant Search are sure to hit the search market -- especially if Yahoo! does well with its beta.
The most obvious problem with Instant Search appears to be the lack of revenue-producing ads -- at least in the beta version. So don't expect Yahoo!'s latest innovation to make much of a difference for its search business. Simply put, I don't think many users will switch to another search service based on a couple of new features.
Rather, some might argue the best way to make headway is to buy large, captive-user bases. A Microsoft purchase of AOL would have an immediate negative impact on Google, since AOL is among the Google's biggest customers. Such a purchase would place a large customer base in Microsoft's grasp. There are rumors that Microsoft is in discussions to buy a stake in AOL, as we read in a recent piece by fellow Fool contributor W.D. Crotty.
To evaluate the potential of Instant Search, we'd do well to look again at the extent to which user loyalty abounds within the search realm. Some might contend there's a good amount of inertia and stickiness among users. They like their search engine and they're likely to stay with it. Yahoo, Google, and MSN all offer great products, leading one to wonder if there's any surefire means to gaining an instant advantage in the competition.
AOL is owned by Time Warner (NYSE:TWX), a Motley Fool Stock Advisor recommendation.
Fool contributor Tom Taulli does not own shares mentioned in this article.
