San Francisco, Dec. 10 (Reuters): Yahoo Inc said yesterday it will begin testing a free desktop search service in early January, following rivals hoping to extend the reach of wildly profitable search-related advertising.

Desktop search, which helps excavate information buried on computer hard drives, is seen as the next frontier in the booming search sector that has generated billions in revenues from ads generated by Web search queries.

Yahoo?s product will use licensed technology from Pasadena, California-based X1 Technologies Inc. to help users search e-mail and a variety of files ? from photos and music to PDF-format documents ? on their hard drives.

Those search capabilities also will be integrated with Yahoo?s own Web search technology, said Jeff Weiner, senior vice-president of Yahoo?s search and marketplace business.

Sunnyvale, California-based Yahoo expects to roll out rapid updates to its desktop service, which will eventually allow users to search even more of the Web. Google Inc, Yahoo's biggest rival, launched its test desktop search service in October.