Yahoo Japan teams with Google on search

Thursday, July 29, 2010

Yahoo Japan will use Google technology to power its Internet search engine and search advertising platform, the Japanese company announced Tuesday, diverging from a nascent alliance between the U.S. Internet portal Yahoo and Microsoft.

The deal puts Yahoo Japan, partly owned by the U.S. company, on a sharply different path from that of its American cousin, Yahoo, which is planning to use Microsoft's Bing search technology by the end of this year under an agreement announced in 2009.

The partnership between Yahoo Japan and Google would create a powerhouse that combines Google's search technology with Yahoo Japan's popular content and services. Financial terms of the deal were not disclosed.

Yahoo holds 34.8 percent of Yahoo Japan, while Softbank, the Japanese cellphone and Web giant, owns 38.6 percent.

Google's share of Web searches in Japan has been growing, but it still trails Yahoo Japan, the market leader. According to Net Ratings, a research firm, Yahoo Japan grabs 53.2 percent of Web queries in the country, followed by Google at 37.3 percent. Microsoft's MSN and Bing searches garnered just 2.6 percent.

Globally, though, Google dominates -- the company had 85 percent of Internet queries, compared with 6.2 percent for Yahoo brand searches in June, according to the analysis arm of Net Applications, a Web services company.

Yahoo Japan's adoption of Google's search technology would mean that about 90 percent of Web queries in Japan would be powered by the company. Yahoo Japan used Google technology for its search engine from 2001 to 2004, but then switched back to Yahoo's system.

Masahiro Inoue, chief executive of Yahoo Japan, said that after a year of careful analysis, the company had concluded that it would ultimately benefit more from Google's search engine than from Microsoft's because of Google's record in Japanese-language queries. Google has had a presence in Japan since 2001.

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