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Looks like a little bit too late, though...shouldn't they have decided to focus on this a bit sooner?
Wonder if this was just a quick way to grab some cash.
Perhaps their product is not strong enough to compete?
Anyway - given the current complete reliance on MSN this looks like a risky move.
The deal also comes only weeks after Inktomi introduced a new version of its Web search technology for businesses, called Inktomi Enterprise Search 5.0.
Must have had some plans to sell prior to or during the development of this.
For Inktomi, the buyout will clip a business that it does not have the resources to support or nourish.
If MSN or somebody else doesn't continue to nourish the other one, that'll be up for sale soon as well.
In October..
It also reported a quarterly loss of $131.6 million including charges, as well as a loss of $500.8 million over the past 12 months.
Emphasis added. Half a billion dollar loss last year!
That's like a throwback to the dot-bomb daze. According to the article the sale will net them 25 mil. At the current burn rate, that will be gone in less than a month.
...and from the previous article:
According to Salomon Smith Barney, Web search and paid inclusion is a $1.4 billion market with the potential to grow 30 to 35 percent per year to 2004, and 20 to 25 percent per year to 2008
Seems like if those predictions are anywhere near correct, there will not be free (relevant?) listing anywhere on the net.
[edited by: skibum at 5:16 am (utc) on Nov. 14, 2002]
Got the same email. Was a bit surprised, but there is always going to be room for two to three search indexes. The tide will turn. It always does.
Heini: "Perhaps their product is not strong enough to compete?" Inktomi's Enterprise search services dominate the corporate world. I didn't know they had "ANY" competition?
Everyone seems to forget so quickly, what was a good traffic provider over the past few years. I guarantee if Google didn't have AOL/Yahoo, Google wouldn't be such a big deal either.
Ink outlasted Infoseek/Excite, and the MSN deal drives far more traffic than AV, or FAST. Nobody is in better position to settle in for the long haul "versus" Google. Some of you guys either didn't get into the game until late 1990, or you just have "short memories".. :)
"The sale of our enterprise search business to Verity puts Inktomi in a much stronger financial position while enabling the company to apply all its resources on a growing market in which it has leading technology, distribution and marketing services," said David Peterschmidt, president and CEO of Inktomi. "In addition, Verity will provide continued product development and support, and we are pleased to offer our more than 2,500 enterprise search customers a migration path to advanced offerings from Verity, the industry leader in enterprise search."
Full-News Release [inktomi.com]
Makes you think this is the first move in a wave of change.
Ahem. What am I, chopped liver? ;)
[google.com...]
Oh, they had. The competition is strong with Fast acting very successfully on that market. Ink even lost the prestigious Firstgov deal to Fast. AV is another player, and now Google tries to get into this segment.
The second reason why I'm asking if Inks product perhaps was not strong enough is the price: 25 Mill... doesn't seem expensive.
So we might see a stronger Inktomi because of this.
I'm not sure the "FirstGov" deal, was much more than the "airplay".
Ink. has done very well over the past 3 years, we were an Enterprise search client from 98-2000, during the period they bought the Infoseek product line, for a "song and a dance".. I'm not sure if Verity bought the Enterprise part of Ink., to take them out of the game (I saw Verity as Ink's real competition), not FAST/Google/AV.
GoogleGuy:
Not to "bust" the Googleized bubble, but you guys were a mere "blip" on the radar, when Ink. went hard into Corporate Enterprise Search services. I really don't think Corporate America is going to take you serious in this market sector, until you go public, and shed the "cool", "homey" image. What works well for the "Masses", but not the IBM types.. :) After all, your Network/Server environment is much "too" efficient for the Corporate world to understand. Unless MIS goes at least 20% over budget, they feel they haven't bought anything. LOL
Lazerzubb: I thought the layoffs in Europe were "across the board".. When I talked w/ our Biz Dev contact at Ink., he indicated they eliminated all the sales offices for web search, and the majority for Enterprise search?
Inktomi announces staff reduction (8 of otc) [inktomi.com]
Any guesses on this one?
I think the October layoff, had to do with the fact they knew they were selling off the Enterprise Search division to Verity. When HP/Compaq merged, they did some advance layoffs in both companies.
I'm not sure I can agree with that. They've proved themselves in market share, what more do they need? Plus Corporate America is just another piece in the world pie.
Above is the link to the Audio WebCast Announcement by Verity, that occured yesterday.
Summation:
Inktomi will remain responsible for the UltraSeek development for Verity.
Approx. 40 Inktomi employees will move across to Verity. The majority will be from Ink's "inside" sales force, and CS group for Enterprise Search.
Verity will assume financial/resource obligations for CS of the Enterprise Search Services, of which 1600 of the 2500+ have active quarterly subscriptions.
In addition to the UltraSeek Search product, Verity also get's the Quiver Classification technology, and Ink's XML ToolKit technology.
Verity has plans to merge the UltraSeek product into their "higher" end K1/K2 search technology products, but is going to move slowly, as to not disrupt current sales efforts.
I think it's a "win/win" for both entities. Ink gets the cash, reduces manpower expenses, and eliminates future financial obligations in the CS area, where they have already received support revenues. Verity get's a proven search product. Though lower end, compared to their K1/K2 platforms, which focus on high end specialty file integration, such as PDF/Notes/etc., Verity can cross sell to both existing customer bases. I think I heard them mention Verity has approx. 1600 installations of their product base.
I for one, am happy to see Inktomi focus on Web Search. Inktomi has proven before they can be a strong player in the market, as they don't market a "stand alone" portal, similar to FAST. Google needs competition, for the entire market to remain healthy, and I think portals are going to realize, that possibly, it doesn't make sense to serve up the same results that the majority of the market is serving.
We're a funny breed here in the US.. If everybody drove a Lexus, we would lose sight of what a great car it is. Inktomi's job in the near future is to re-solidify themselves as a major presence in the US market place for Web Search. Major portal deals drive "pay for inclusion" income up. And that is the major hurdle.
Inktomi should possibly look to their strongest relationship, MSN. If they could convice MSN to eliminate the LS directory results, or signifigantly reduce the # of LS results that are displayed, the search numbers would increase dramatically. Secondly, they may be able to convince Yahoo, to follow through on Yahoo's statement about possibly integrating results from multiple search providers. This would make Yahoo's index completely unique, from any other portal. Similar to Metacrawler.com, but quality search results intertwined, rather than segregated results from PPC engines... Thoughts?
RedZone, our memories are intact.
I agree, any market can become saturated. The Google search market can become over-saturated or untrendy in the near future. At some point it will be worth while for somebody to offer something unique.
If Ink can hold out long enough.
ie Ink are selling for $US25m a business based on:
- what's left of Ultraseek (which Ink bought for $344.7m) and
- Quiver, which Ink bought for $12m only a few months ago
Hmmm I wonder if I can sell something to Ink - or maybe, get them to buy something I want - and I'll buy it off them later......
: )
Ahem. What am I, chopped liver?In this market, probably :) I agree with redzone, once Google goes "public" then Google may be able to reach puberty in enterprise market. You may be the shiny apple but these are oranges:)
Google Guy may not be chopped liver, but's it's a good job he is obviously such a 'respected contributor' to this formum, otherwise one could construe that he just made a 'commercial post' (with hyperlink) to promote his company's products! :)
Tut, tut, tut!
