Freedom Lawyers of America

By Bambi Francisco, CBS.MarketWatch.com
Last Update: 2:34 PM ET Sep 23, 2002
SAN FRANCISCO (CBS.MW) -- Google unveiled its service for news Monday, the latest move to build upon its popular platform for search, and potentially compete with its portal partners.

The service aggregates more than 4,000 English-language news sources from around the world, such as The Financial Times, CNet's (CNET) News.com, TheStreet.com (TSCM), The New York Times, USA Today, Reuters, Fox Sports, and ABC News. It includes a fast crawler and a photo search.

A more limited version of the service, which is still in beta form, has been available for a few months.

While many articles aggregated on the Web can be found via stock ticker and are ranked based on freshness, articles listed on Google are ranked based on Google's search methodology to rank relevance. The algorithm is based on many factors, including how often and on what sites a story appears on the Web.

The service could give Google yet another product of aggregated search listings to sell to its growing list of portal customers. Those customers have been signing on for Google's paid listings of advertisers, which generate money for both Google and the distribution partners every time a user clicks onto one of the advertisers' links. It's a proven moneymaker in an environment where revenues and profits are scarce.

It's also a business that Overture (OVER), with $650 million in expected sales this year, defined, dominates and is aggressively expanding to retain its lead. Overture allows advertisers to bid for placement in its search results. Advertisers pay the amount of their bid only when a consumer clicks on their listing.

Google has made progress against Overture, however, partly due to its relationship with portals. Google's initial search product is the backfill or algorithmic searches it sells to many portals, such as Yahoo (YHOO).

But because of Google's clean site and its reputation as a pure search engine, users began to bypass the portals and go directly to Google's site. Some estimates indicate that about 40 percent of all searches are currently done on Google. This has raised questions regarding Google's paid listings, and perhaps its news search service.

How does Google build trust among distribution partners when the strength of its brand name could eventually kill the search business of these partners?

As Google CEO Eric Schmidt has said in the past: "We have convinced them [portal partners] that their traffic goes up when their users use Google."