Google Image search has such a feature too. One can drap&drop a local image to the search bar on the Google Image page. Help page: https://support.google.com/websearch/answer/1325808?hl=en ; info: http://www.quora.com/What-is-the-algorithm-used-by-Google-Se...

One of the earliest such similarity image search was a research prototype on Airliner.net (ca. 2006): http://www.airliners.net/similarity/ , e.g. http://www.airliners.net/search/similarity_search.php?photo_... , http://infolab.stanford.edu/~wangz/project/imsearch/SIMPLIci... , http://alipr.com/cgi-bin/zwang/regionsearch_show.cgi

It's called Reverse image search: http://en.wikipedia.org/wiki/Reverse_image_search