Yahoo! to acquire Inktomi for $235 million.
The only reason I can think of for Yahoo! to make this deal is to challenge Google for search supremacy. Google has done an amazing job of becoming the Net’s default search engine, and leveraging that position to create a profitable business. Inktomi has a strong search technology portfolio. It recently pulled back from its amitious efforts in content management and related fields to focus on the search market. The acquisition gives Yahoo! the resources to compete head-on with Google as a search provider for both consumer and corporate markets.
One thing that doesn’t add up. Yahoo! uses Google for its search results today. It just renewed that agreement in October for an undisclosed "long term". Sure, Inktomi gives Yahoo! many other revenue opportunities. But the value of Inktomi to Yahoo! seems smaller if the core portal search function is off the table.
Another interesting question is who will be next. How about USA Interactive buying Ask Jeeves?