"Google (NASDAQ: GOOG) remains the dominant search engine on the web," notes Paul Tracy. In his StreetAuthority Market Advisor, he views the stock as a solid buy for growth investors.

"In economic downturns, one of the first costs most companies cut is advertising. Not surprisingly, over the past year, most companies have slashed their advertising budgets in response to the severe economic downturn.

"But online ad spending has remained remarkably resilient. GOOG's system targets specific ads based on what users type into their search box, geographic location and other factors.

Google (NASDAQ: GOOG) is recently down $14.54 to $471.80 in pre-open trading.

Smith Barney says: "Weak January Click Data from comScore." BMO Capital Markets says: "US Search Data Points Curb Enthusiasm."

GOOG March option implied volatility of 39 is above its 26-week average of 34 according to Track Data, suggesting larger price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Hewlett-Packard Company (NYSE: HPQ) has inked a deal with Time Warner Inc.'s (NYSE: TWX) AOL unit to install AOL's web browser start page, toolbar and search on HP personal computers sold worldwide. This may not sound like a big deal, but it is, since the vast majority of computer users never change the default start pages that load when their Internet Explorer web browser starts up. Having AOL's search engine, which is powered by Google Inc. (NASDAQ: GOOG), as the default is a biggie as well. HP, after all, sells more desktop and laptop computers than any company on the planet at this time.

AOL will use its custom "myAOL" homepage as the default website on all HP PCs, which will encourage new HP owners to use AOL's services like email, news, finance and weather. While some computer users complain of unwanted "bloatware" that ships on new PCs, the practice of providing new PC owners with default relationships to service providers such as AOL is likely to continue.

Now, what is unanswered here is how this will affect HP's existing relationship with internet portal Yahoo, Inc. (NASDAQ: YHOO) which has been in place for almost one year. Since HP did not make a single reference to this relationship, one must surmise that HP is dumping Yahoo! completely from its systems and replacing Yahoo!'s services with AOL's services. If that is the case, Yahoo! just earned a huge black eye and AOL came out very rosy. With HP competitor Dell, Inc. (NASDAQ: DELL) using Google services as the default on its PCs, this leaves Yahoo! in a tough position without a top-tier PC partner.

Actually, fluctuations happen every single month among the internet search kingpins like Google, Yahoo! (NASDAQ: YHOO), Microsoft Corp. (NASDAQ: MSFT) and Ask.com (NASDAQ: IACI). When Google and Yahoo! swap a half of a percentage point in market share for internet search, blog entries (like this one) and the media play it up. It's a non-issue, though. There are an infinite number of variables during each month globally -- like PC shipments, broadband internet penetration, mobile phone sales and marketing programs from all the search leaders -- which all affect market share in these nice little percentage slices.

Google web properties held fast in June with a 49.5% share of the U.S. search market, while Yahoo! sat at a comfortable 25.1% of the U.S. market. Microsoft was in third place with 13.2% and Ask.com and its network saw a market share of 5%. In fifth was Time Warner Inc. (NYSE: TWX)'s AOL unit, with 4.2%. To put those percentages into perspective, U.S. internet customers conducted 8 billion searches in June, up 26% from June 2006. So, although the percentages are staying pretty much the same in terms of proportion, the actual volume has spiked nicely from a year ago. And, Google is still taking the lion's share. Minor percentage drop? Google's still sitting very pretty.

We continue to hear about how Google could face stiff competition in the Internet search arena from the likes of a re-energized Yahoo! and Microsoft. Both competitors have been reinventing their search businesses in an attempt to get in on the lucrative paid-search advertising business that Google now essentially owns.

But Google has an advantage: The core competency of the company is search. That is Google's brand identity and therefore, the one core service that customers turn to it for.

I mention this because try as it might, Yahoo! won't be able to compete to the point of causing Google lost sleep in the Internet search business -- and strangely it has even admitted this. It plans instead to focus on building content relationships with its customers and offering distinguishing services that are compelling.

Microsoft, arguably the toughest competitor in the computing age, also will not be able to take much share away from Google regarding search. It may be able to beef up search relevance under the new Windows Live moniker. But branding is all important in the consumer mind (just ask Nike or Apple about this). And, try as it might,  Microsoft's brand will never stand for search.