Google upgrades services to remain on top of Yahoo

Yahoo was a key factor in getting Google up and running.
SAN FRANCISCO (AP) -- Internet search engine leader Google Inc. this week introduced a simpler way to publish the online personal journals known as "blogs," continuing a flurry of improvements that has coincided with stiffer competition from its former ally, Yahoo! Inc.
The revisions to Google's Blogger.com are designed to make it easier for computer neophytes to create and update their own personal journals for free.
The journals -- known as Web logs, or blogs for short -- have caught on among the high-tech cognoscenti as an alternative way to spread information and commentary, skirting the mainstream media.
Mountain View, Calif.-based Google hopes the Blogger changes will encourage more people to visit and use the 5-year-old site. It's the first significant upgrade of Blogger.com since Google bought the site's parent company, Pyra Labs, 15 months ago.
Google declined to reveal how many people use Blogger.com, which boasted more than 1 million members, including 200,000 active blogs, at the time of the acquisition.
Beyond searches
Blogger's new look isn't in itself a direct assault on Yahoo, which doesn't offer blogging services. But Blogger is part of a broader push to diversify Google beyond the basic search engine that has made its name synonymous with looking things up.
During the last three months, Google has announced plans for a free e-mail service, repositioned its online shopping service to attract more traffic and retooled its search engine so it indexes more Web pages and provides more meaningful results within a specified community.
The jockeying began in February when Yahoo began to phase out Google's search technology on its own Web site, ending a business partnership that began in 2000.
Yahoo instead is shifting to its own search technology in an aggressive bid to overtake Google, backing its push with an advertising blitz that touts its Web site as a "life engine."
In contrast, Google hasn't needed any advertising to attract attention, thanks to the explosion of publicity surrounding the company's plans for an initial public offering of stock that is expected to raise at least $2.7 billion.
The excitement about Google's IPO has taken some of the luster off Yahoo's stock.
After reviewing Google's IPO prospectus and learning more about the company's financial success, some investors apparently decided to cash out of their Yahoo holdings.
Yahoo's market value has dropped by 8 percent since Google's IPO filing. The company's shares declined $1.47 to $51.33 during Monday's trading on the Nasdaq Stock Market.
The industry spotlight will shift back to Yahoo later this week when Yahoo executives are scheduled to discuss their outlook with analysts.
Yahoo declined to discuss the agenda for Thursday's meeting, but American Technology Research analyst Mark Mahaney expects the Google IPO to be on everyone's minds, including Yahoo's management.
"They might not mention Google specifically, but obviously they know they are going to be asked about the IPO," Mahaney said. "I doubt if they will trash Google, but I expect them to try to make people realize all the things that are working in [Yahoo's] favor."
Yahoo has bounced back from the dot-com bust, earning $238 million last year. Then Yahoo more than doubled its profit during the first three months of this year. Despite the recent erosion, the company's stock has tripled since the end of 2002.
In its IPO filing, Google identifies Yahoo, along with software giant Microsoft Corp., as its biggest competitive threat.
Relationship
The intensifying rivalry between Yahoo and Google has fractured a once-close relationship.
Google co-founders Sergey Brin and Larry Page launched their company in 1998 after receiving early encouragement and guidance from Yahoo co-founder David Filo. Yahoo subsequently helped finance Google, investing $10 million in the company nearly four years ago. The exact size of Yahoo's stake in Google hasn't been disclosed, except that it's less than 5 percent.
Both Brin and Page recently have sneered at some of Yahoo's search engine policies, making it clear "the gloves have come off," said Danny Sullivan, editor of industry newsletter Search Engine Watch. "They aren't even making the pretense of being on friendly terms any longer."
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