Is it legal to clone a website or software if looks identical and code and images is 100% your own?
Even if you do all the work yourself, it's illegal if you copy someone else's work. That's called Forgery....
but saying that you can use someones idea, for example google search engine and yahoo search engine both does the same thing
They may perform the same function, but they do it in different and unique methods - hence why the search results are different. That's not copying.
Copyright means company have rights for his product or any other thing for which he can take legal steps on any one. Any other person can't do anything when other person have rights for that thing .
My advice would be to get professional, qualified advice for your particular circumstances. I would treat any "advice" received in an environment like this as purely just someone's opinion because I have received total garbage dressed up as "legal advice" from a badged SP member (not anyone in this thread up to this point) on too many occasions.
That gets more into patent law rather than copyright law. Copyright law doesn't prevent two sites from implementing the same functionality using different code to do it. For one to prevent the other from doing the same thing with different code they'd need to have taken out a patent on the process so that any code used to perform the process would be disallowed by the patent. It would only breach copyright if the code were close enough to being identical that it was obviously copied.
Hopefully the comments you receive here are never "garbage" but your advice is prudent none the less. The advice here is purely for discussion and should not be taken as legal direction although you may find it useful in deciding on your next steps. There are a few attorneys who contribute to posts in the forum but even then, they don't have all your facts -- if the matter concerns something critical to your business or liability, you should always get proper counsel.
That said, I agree with felgall - when you talk about processes and business methods you're leaving the realm of copyrights and entering patents. While theoretically these are reserved for the most novel and unique ideas, there are a lot of patents in the US and other countries that can include some pretty simple function. www.uspto.gov lets you search around the US filings [pending and approved].
Copyright (supposedly) cannot protect the 'idea', only the execution. So you should be free to create, say, an ebay-style web site, but the site you create should not share the graphical look of ebay, nor should it contain any actual code from ebay. Whether your execution infringes copyright is for a court to decide.
Patents are different - for example, Amazon's 'one click' ordering is (controversially) patented, so generally speaking, no other web site can use such a system, even if they used completely different code and graphics etc.
You can copy anyone's website as long as you are not copying his ideas i.e. you can copy others website and can implement your ideas into it. You can have website performing the same function but in different and unique way of yours.
Actually it's almost the inverse of what you said. The content, design and marks of a site are what can be copyrighted... not the idea of what it does. Those may or may not have their own protection under different laws like business methods patents.
This really gets into the gray/iffy area of intellectual property. If I think up the idea for, say, the cloud, do I own the idea for the cloud? Even if I create a cloud-based system? No. Not really.
But again, I'm not a lawyer, or even close.
I've only seen a few attorneys around this forum [and I'm not one of them either]. So theory discussions are much more practical...
Your post brings up some great remarks and while I've had some solid courses on copyright law, I'm not sure how where changing the elements impacts the rules if the outcome is the same and you knowingly base it off of another work [derivative works]. For example, you can hear a song, hire someone to record it, and still get sued [and lose] for infringing the copyrights of the words. Similarly if you see a painting that's still under copyright, you can't paint your own and sell it even with your own brushes, canvas and paint. It's still a derivative.... But would it violate anything to change the words and film the exact same story for a music video?
That's the best parallel I can think of for a website: if you built the same thing yourself without knowing the other existed it would clearly not violate their rights but if you clone it I'm not sure having unique code would get you off the hook.
A couple remarks from the copyright book via Wikipedia
A “derivative work” is a work based upon one or more pre-existing works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed, or adapted. A work consisting of editorial revisions, annotations, elaborations, or other modifications which, as a whole, represent an original work of authorship, is a “derivative work”. - http://www.law.cornell.edu/uscode/17/101.html
...To be copyrightable, a derivative work must be different enough from the original to be regarded as a "new work" or must contain a substantial amount of new material. Making minor changes or additions of little substance to a preexisting work will not qualify the work as a new version for copyright purposes. The new material must be original and copyrightable in itself. Titles, short phrases, and format, for example, are not copyrightable. - http://www.copyright.gov/circs/circ14.pdf
Now ideas are a whole other issue in their own right. For bigger businesses and programs there may even be a patent at play to consider but I'll leave that for another day as it wasn't really the subject of the OP's remarks.