Yahoo Boosts Its Web-Search PowerYahoo Boosts Its Web-Search Power

Hoping to bolster its Web-search capabilities, Yahoo plans to buy Inktomi for about $235 million in cash. "This is very, very powerful," says Forrester Research analyst Charlene Li. "You'll get the combination of Yahoo and Inktomi put together."

Yahoo executives won't discuss details of how they'll leverage Inktomi's technology until the deal closes, which is expected later this quarter. But Yahoo will likely offer business customers Inktomi's paid inclusion services, which ensure that companies' products appear when visitors conduct relevant searches, Li says. Companies such as Amazon, eBay, and Wal-Mart already use the service. Ultimately, searches will combine Inktomi technology with Yahoo's business directory, giving users results that index more Web content than is available today from either company separately, Li says.

The move illustrates the importance to Yahoo of search as a strategic asset. Of North American online consumers who visit a portal or search engine site at least once a week, 55% use Yahoo, according to Forrester.

The sale marks Inktomi's second deal in as many months. Verity bought Inktomi's enterprise search software business in November for $25 million in cash.