On Monday, Wired Digital's HotBot search engine began serving results directly from Direct Hit. Wired and Direct Hit estimate that between half and two-thirds of HotBot users will be served a page with results from Direct Hit's "popularity engine," a database that ranks pages by the number of users who actually follow links to them.

Previously, Direct Hit results were offered to HotBot users as an option to supplement a Web-page database provided by Inktomi (INKT).

"In the short term, it means that we send fewer queries to Inktomi," says HotBot marketing director David Pritchard. "But with the rapid growth we've seen in HotBot, we expect that should more than make up for it -- the pie gets bigger."

DIVERSITY IS KEYInktomi doubts that the San Mateo-based company's results will suffer in the next quarter. According to spokesperson Kevin Brown, Inktomi gets less than 20 percent of its revenues from HotBot, and search services now represent less than half of all revenues.

The company has diversified its search customer base to include giants like Yahoo (YHOO), and is seeing strong growth in its Traffic Server caching product. It also will soon launch customer sites using its Shopping Engine, including Infoseek's Go Shop.

The HotBot account is still a flagship for Inktomi; when the search engine launched in 1996, HotBot was Inktomi's only customer, and revenues from the HotBot partnership helped sustain Inktomi through its initial public offering and beyond.

In short, Inktomi diversified its revenue base just in time: Direct Hit was a close call.

Direct Hit, meanwhile, isn't counting on just HotBot, either. Its customers include America Online's (AOL) ICQ division and Ziff-Davis's (ZD) ZDNet Web site. (Ziff-Davis is a minority shareholder in Red Herring Communications, publisher of the Red Herring Online.)

LOOKING SMARTERDirect Hit's services will soon launch on LookSmart, a San Francisco-based Web directory. LookSmart currently uses searches from Compaq (CPQ) subsidiary AltaVista to supplement its directory of Web pages.

LookSmart had tried various techniques to improve the relevance of search results, says an executive there, but they all came up short.

"We've found that all of the algorithms come up short because none of them take advantage of what users are actually doing on the Web," says Peter Tomassi, a LookSmart executive producer. "And none of them pick up on new trends on the Web."

According to Mr. Tomassi, quality and price drove the company to pick Direct Hit. "We're actually charged per query for AltaVista," he says. "From Direct Hit, we get a better quality of results for the same price as we're paying to AltaVista."

In other words, if users need to go through fewer results to find the page they're looking for, then LookSmart pays for fewer queries, and the user's happier.

"We think we provide better quality results at a competitive price," says Direct Hit CEO Mike Cassidy. "We're not more expensive [than Inktomi and AltaVista."

DIRECT COMPETITORSMr. Cassidy also says Direct Hit has developed Web-searching technology like Inktomi's and AltaVista's, and expects to announce a customer for it within six months.

Inktomi's Mr. Brown admits he was surprised to hear of Direct Hit's plans, but says that Inktomi's track record would count for a lot among its portal customers.

"The thing that will be important for Direct Hit to demonstrate to win customers will be the robustness, the operational experience -- we think there are a lot of substantial barriers to success for a startup that's trying to replicate what Inktomi does," says Mr. Brown. "We will see some competition from people with a piece of the puzzle, and our perspective is that a piece of the puzzle is no longer as appealing as it used to be."

As in many technology industries, infrastructure companies serving the portals will likely move from one-trick ponies to full-service shops.

But Inktomi's recent announcement of expansions to its search offerings have only been taken by a few existing customers. And while it has some customers across product lines -- @Home Network, for example, goes to Inktomi for both caching and search services -- Inktomi may find increasing challenges from startups like Direct Hit.