Google's new Custom Search Engine will have a strong impact on government search sites even though the government sites won't be required to run Google ads, according to an analysis conducted by Arnold Information Technology (AIT).

"Every government agency can now put up a Google box at no cost," said Stephen Arnold, AIT's managing director, in an interview Tuesday shortly after Google unveiled its latest search innovation. "Applications will come out of the woodwork for this function." Arnold, who has written a book on Google, runs the small IT consultancy from Louisville, Ky.

In announcing Google Custom Search Engine on Monday, the search engine giant said it will enable operators of Internet sites to choose and rank search page results using their own indexes. The company said it expects the approach will increase its advertising sales, but, at the same time, it noted that educational institutions, nonprofits, and government agencies won't be required to include ads.

A 'no-advertising policy' for government sites won't impede the rollout of Google Custom Engine Search in government agencies, said Arnold. "Google's penetration of the US government is invisible," said Arnold. "Based on our data, more than 100 agencies have a Google appliance.

"The integration tasks are not particularly difficult but they are still largely new territory for government agencies, so Google's integration partners have an opportunity to generate significant revenue quickly."

One search company that has successfully ridden along on the Google's coattails is Inxight Software's Inxight Federal Systems Group, which Monday announced that it was partnering with additional firms to provide natural language processing and text analytics. The contract, also with partner GMRI will see its solution applied to counterterrorism activities by a U.S. intelligence agency.

In his analysis of government search activities, Arnold breaks the market into different sectors with Inxight occupying the partner sector with Google supplying the intitial comprehensive searches and partners then refining and narrowing searches for clients and customers. "Most of Google's partners have a strong interest in government business," Arnold said. "And it's just easy money for them (the partners.) It's a nice business in the states, too."

Arnold said there is great demand among many government agencies to tap into Google's more than 80 services. He observed that several agencies already have substantial deals with Google for geospatial projects.

Other companies below Google in the search engine food chain have been nailing down government work in recent days. For instance, earlier this month Convera Corporation, unveiled the latest version of its RetrievalWare 8.2, which is largely aimed at government agencies. The firm has supplied search and retrieval technology to the defense and intelligence community for more than 20 years. Last week, Convera announced that it has teamed up with Vivisimo to provide image search of FirstGov.gov, the official web portal of the U.S. government.

Arnold places Vivisimo in the "anti-Google" sector, largely because it teams up with Microsoft in carrying out searches. Earlier this month, Vivisimo hauled down an important Defense Department contract when its Velocity Search Platform was selected to improve search and navigation of DOD's MilitaryHOMEFRONT portal. www.militaryhomefront.dod.mil.

Google Custom Search Engine will likely present a formidable challenge to Fast Search & Transfer, which Arnold says "competes directly with Google." FAST has been enjoying strong revenue growth as evidenced by its third quarter financial report Wednesday. The company reported third quarter revenues of $42.5 million " up 60 percent from $26.6 million recorded in previous year's third quarter.

Arnold said the Google is likely to step up its competition with FAST going forward.

For now, a rising tide will lift virtually all search engine boats in governmental waters, said Arnold, even as he predicts Google's Custom Search Engine will eventually "kill a lot of competitors dead." Arnold traces much of what he calls Google's "magic" to its massive population of 250,000 processing units, which constitute a massive computer able to handle the billions of transactions that the company's Custom Search Engine will soon create.

"The government search sector is undergoing a lot of change and innovation," he said. "No one understands the plumbing that makes this type of Googley magic possible. Google's technology is invisible and, therefore, magic."