The service will use the same underlying search technology that powers AltaVista's primary search engine, sources said. But the site is expected to look very different, the sources added, as it will not support banner advertisements; instead, it will rely on selling links to merchants or other businesses that want to maintain a presence on the site.
AltaVista executives declined to comment. Yet the company has scheduled a press conference later this week at which it may formally unveil the new search tool.
Sources said the company is considering calling the service "Raging Search."
The new search service is AltaVista's attempt to appeal to more sophisticated Web users, sources said. With the increasing popularity of search engine technologies such as Google, the move reflects AltaVista's attempt to regain its appeal among so-called early adopter Web users.
According to the sources, AltaVista's search plans would put it squarely in the sites of Google?s expanding audience.
"They definitely put up a site that is clearly designed to compete head on with Google," said one source who requested anonymity. "There's no question that Google created an incredible stir among what AltaVista would like to consider as its core audience."
Google is a start-up search engine that is backed by some of Silicon Valley's most influential venture capitalists. Last June, the company received a $25 million round of financing from Sequoia Capital and Kleiner Perkins Caufield & Byers. The company also has Sequoia's Michael Moritz and Kleiner's John Doerr on its board of directors.
Google was founded in 1998 by Stanford University computer science graduates Sergey Brin and Larry Page. Its technology resembles citation analysis, which ranks the importance of documents by how many times they are cited. Google search technology also ranks results based on the the popularity of the site. A site's popularity is measured by how many other sites link to it.
Long regarded as the granddaddy of search engines, AltaVista has lately focused its efforts on becoming a consumer-focused Web portal. After CMGI acquired AltaVista from Compaq Computer last year for $2.3 billion, the site transformed into an aggregator of content and Web services similar to Yahoo.
As part of AltaVista's refurbished image, CMGI in October invested $120 million in a massive advertising campaign. AltaVista's TV commercials featured cameos from celebrities such as actress Pamela Anderson and chess master Garry Kasparov in an attempt to appeal to a more mainstream audience.
But competing against established Web portal players has been difficult for AltaVista. The company's audience traffic among U.S. households has failed to slow a growing gap between it and top Web properties such as Yahoo and America Online.
In fact, many "second-tier" portals are increasingly feeling the heat from a market that's segmenting into haves and have-nots. One example is Disney's Go.com, which recently said it would pull back its general portal efforts to focus more on entertainment content. In addition, cable ISP Excite@Home recently said it would focus more resources on its broadband business at the expense of its narrowband Excite.com portal.
AltaVista's expected strategy shift comes after its decision last month to scrap its initial public offering in light of poor market conditions.
News.com's Paul Festa contributed to this report.