According to comScore, Google increased its dominance during August by attracting 63% of all search engine traffic, up from 61.9% during the month of July. comScore's data was based on 11.7 billion searches in the month, and shows that Yahoo and Microsoft are still unable to tap into the valuable search engine traffic that Google maintains.
Yahoo scored a very distant second place, with 19.6% of all search engine traffic. This was a drop of 0.9% from its July figures. Third place goes to Microsoft, who scored 8.3% of search engine traffic during the month, down 0.6% from the previous month.
According to TechCrunch, eBay has hired Deutsche Bank to help the company unload StumbleUpon, a website recommendation service that it acquired a little over a year ago, back in May 2007.
At the time that eBay purchased StumbleUpon, it paid $75 million for the company, and it is pretty doubtful that it is going to be able to sell it for that amount, probably far less due to the inability to grow its popularity over the past 16 months.
Google Inc. (NASDAQ: GOOG) can't pick up market share on the locals in some places including Russia, China and Japan. Relatively small search companies in these countries hold pieces of the search business that are often above 60%. If Google is going to continue its march toward world domination, it cannot let a bunch of tiny competitors get in the way.
According to the FT, "Baidu in China and Naver in South Korea each handle about 60 percent of internet searches in their respective countries." Google faces significant problems because these markets are growing quickly, unlike the U.S. and Europe where internet use is flattening. Local language products already have brand recognition and systems that work well in local languages.
The news is even worse for Yahoo! (NASDAQ: YHOO). With its share of the American search market shrinking, it has little recourse beyond trying to improve its overseas presence and to pick up search share on mobile devices. Yahoo does own part of Yahoo! Japan, but it does not have a meaningful market share in any other large country.
Google has a problem overseas, but Yahoo! has a disaster.
Douglas A. McIntyre is an editor at 247wallst.com.
The U.S. government is looking into whether the partnership that would allow Google (NASDAQ: GOOG) to sell search ads on Yahoo! (NASDAQ: YHOO) is anticompetitive. The two companies have over 75% of the search market in the U.S. European Union regulators have also started an investigation.
Now the real piling on has begun. According toThe Wall Street Journal, The World Association of Newspapers is opposing the deal because "the agreement would reduce the cost of paid search ads and lower revenues for newspapers' and others' Web sites." That adds a bit of confusion. Marketers oppose the deal because a monopoly would raise rates and cost them more money.
The future of the agreement is now being challenged from a number of sides for a number of reasons. If the pressure becomes great enough, Google may simply walk away. Selling advertising for Yahoo! may be a good business, but it is not likely to balloon the search giant's earnings.
Yahoo! is another matter. It needs improved revenue from search ads to make the case that it should stay independent and that is can drive earnings up on its own.
Without Google, Yahoo! has a very modest future. At $18.85, Yahoo! trades near a 52-week low. Without Google, the shares could go much lower.
For the most part, I've been an avid user of Google (NASDAQ: GOOG) since it launched ten years ago. It's almost like a natural reflex for me.
I'm not alone. In fact, this partially explains why mega players such as Yahoo! (NASFDAQ: YHOO) and Microsoft (NASDAQ: MSFT) can't seem to make any headway.
So, that's why it was notable when a new search engine hit the internet: Cuil.
The hook? Well, there are more pages indexed. And, the interface is flashier. In other words, it's the anti-Google approach. Interestingly enough, the two founders, Anna Patterson and Russell Power, are former Google employees.
However, when Cuil launched, the messaging was fairly striking; that is, the mission was to be the Google-killer.
In the end, Cuil got a harsh lesson. For users -- who have many choices -- there must be compelling reasons to make a change. Simply put, Cuil fell well short of expectations. For example, a good number of search queries were off-the-mark. As a result, the media slammed Cuil.
According to Techcrunch, Cuil's traffic has plunged since the July launch. It also looks like the company's vice president of product, Louis Monier, has resigned his post (he is a guru of search and a former Google employee).
Something else: Cuil has raised two rounds of venture capital (the latest round was for $25 million). And the valuation? A whopping $200 million (this is according to the analytical work of PE Data Center). In other words, investors will probably need to wait quite awhile to get a return -- if ever.
There have been concerns that the rate at which people clicking on the text ads next to Google (NASDAQ:GOOG) search results has been falling. These concerns caused spirited debate before the company's last earnings report and may have even pushed the firm's stock price down. But earnings were excellent, and much of the fear went away.
Now it turns out the Google ads are doing better and better, and clicks on ads at rivals are falling. The Wall Street Journal, using comScore (NASDAQ: SCOR) data, reports that Google's performance improved in April and "Paid clicks for Microsoft Corp (NASDAQ:MSFT) and Yahoo Inc (NASDAQ:YHOO) meanwhile declined during the month, according to the data." The paper reports that Google's performance in the U.S. was 20% ahead of expectations.
Good for Google, but very bad for its two chief rivals. The information indicates that even if Microsoft buys Yahoo!, the combined operation will have a much smaller market share in search than Google, and its advertising will perform worse. If Microsoft and Yahoo! stay separate, their uphill battles could face extremely long odds.
From all the data available, Google's search technology brings back better results for consumers. Its technology for matching ads to searches also appears to work much better. The fight for the domination of this critical portion of the internet is over. The only question is whether the second and third place firms can make money long-term.
Anyone who did not think a Microsoft (NASDAQ:MSFT) buyout of Yahoo! (NASDAQ:YHOO) has become less likely should have stopped by the All Things Digital conference. According toReuters, "Yahoo Inc Chief Executive Jerry Yang said on Wednesday a potential deal with Microsoft has tremendous power, but the software giant appears no longer interested in a full merger."
The leaves Yahoo! management, its board, and takeover artist Carl Icahn in a tough spot. Many analysts believe that without a deal, the Yahoo! shares could drop back near $20, where they traded before the offer from Redmond. Yahoo! currently changes hands at $27.
The news is a sign that Microsoft thinks it can do almost anything on its own, including challenging Google (NASDAQ:GOOG) in the search business. Gates, Ballmer & Co. have the money to get the engineering hands on board to push better search tech, but user loyalty to Google may be so great that even a much better product from Microsoft will not break its rival's hold on the market.
Microsoft has had success exceeding the market's expectations before. No one believed that the company's Xbox could challenge the Sony (NYSE:SNE) PlayStation franchise.
But, search engines are not game consoles and the rules in one game do not necessarily apply in another.
All eyes will be on Yahoo Inc. (NASDAQ: YHOO) as it reports quarterly results later today.
Analysts are expecting profit of 9 cents on revenue excluding payments to partners of $1.32 billion, according to Thomson Financial. But that is secondary.
Wall Street wants Yahoo Chief Executive Jerry Yang to prove why the Internet portal is worth more than the $31 per share Microsoft Corp. (NASDAQ: MSFT) has offered. To say investors are skeptical that the Sunnyvale, Calif.-based company can do any better is an understatement.
"They're just trying to save some face and extract some value out of it for shareholder," said RBC Capital Markets analyst Ross Sandler in an interview with Bloomberg News.
Indeed, Bloomberg points out that Yahoo's net income probably fell for the ninth straight quarter. Microsoft CEO Steve Ballmer said that the results -- whatever they may be -- won't affect Yahoo's value to the software giant. Though he hasn't ruled out LOWERING Microsoft's bid, chances are remote that will happen.
By some measures, China-based search engine Baidu (NASDAQ: BIDU) has 60% of the search engine market in that country, which now has more internet users than the U.S. Google (NASDAQ: GOOG) is a distant second.
According to Reuters, "Lee Kai-Fu, Google's president for Greater China, said in an interview that the Silicon Valley company intends to add 200 staffers in 2008 to its existing 600 employees and to keep up that level of hiring for the next three to five years."
All of the effort may not help. The Chinese may prefer to use the services of a company that was founded in their own country and where the search technology was originally based on their language. China has watched U.S. tech efforts from Microsoft (NASDAQ: MSFT) to Hewlett-Packard (NASDAQ: HPQ) come into the country and dominate market share. The capital from those efforts makes it way back to the U.S.
Baidu is one of the few Chinese tech companies that has a huge lead on its Western competition. Many people there prefer it that way.
Douglas A. McIntyre is an editor at 247wallst.com.
The deal for Yahoo! (NASDAQ: YHOO) to allow Google (NASDAQ: GOOG) to sell text ads on the portal's search pages may happen more quickly than most analysts believed. According toThe Wall Street Journal, "Yahoo Inc. moved closer to outsourcing its search advertising to Google Inc. after an initial test of the system yielded what the two firms deemed positive results."
The partnership could add several hundred million dollars of revenue to Yahoo!'s annual numbers. Most observers believe that regulators would be troubled by the two largest search companies joining forces.
The news still begs that question of whether any deal can be better than Microsoft's (NASDAQ: MSFT) offer to buy Yahoo! for over $29 a share. The first offer was at $31, but Microsoft's shares, part of the payment, have declined since then.
Yahoo!'s actions to run away from Microsoft seem to go along the lines of trying to stay independent for the sake of being independent. In other words, the company has no answer to the question of why investors are better off if Yahoo! stands alone.
Since no one other than Microsoft wants to buy the portal, the answer is that Yahoo! has lost all options to defend its present strategy. A deal with Google does not, in any way Yahoo! can explain, make the company worth $30 a share.
Douglas A. McIntyre is an editor at 247wallst.com.
Google's (GOOG) shares continue to be stuck below $500 where they have been since late February. Part of the reason for the fall is that comScore data showed that the number of people who clicked on ads at the big search engine was weak in January.
It looks like the stock will drop again as "click rates" for Google ads rose only 3% in February when compared with the figures for the same month last year. According toMarketWatch: "Google reported 25% growth in paid clicks in its fiscal fourth quarter ended in December. But comScore data released last month showed flat growth in Google's paid clicks in January." Now, investors can ponder another piece of bad news.
The easy answer to the Google data is that a recession is slowing down advertising activity everywhere. Google carries millions of ads in its AdSense program, so it would make sense that it should suffer some fallout.
But, the answer may be more troubling than that. Readers of Google's search pages may be discovering that the text ads next to the listings are from marketers trying to take advantage of people looking for information by clogging pages with related messages. As more people understand the system of targeting based on search results, fewer are willing to be sucked in by companies trying to reach them due to their behavior.
If the Google system of matching ads to search results is putting its customers off, that would be worse news than the effects of a recession.
Douglas A. McIntyre is an editor at 247wallst.com.
Steffen Mueller's past gig was as a product manager at Google (NASDAQ: GOOG), working on Google Maps, Froogle, and Google Web Search. Well, now he's got his own venture: Topicle.
And yes, it's focused on the massive search business. Think of it as Google meets Wikipedia. Essentially, Topicle relies on the efforts of users, who collect helpful web links. These are based on voting, using a 1-5 scale.
Ironically enough, Topicle is in a way a move to the past. After all, when Yahoo! (NASDAQ: YHOO) got its start, the search results were primarily based on the decisions of, well, people.
In theory, Topicle makes sense and should result in relevant results. However, it's going to be tough to get critical mass, especially in light of the many search options available for users. Besides, building a site that's based on user participation is never an easy thing to do.
In November internet search engine rankings by comScore (NASDAQ: SCOR), Google (NASDAQ: GOOG) again lead the pack, with 5.9 billion core searches conducted -- a 58.6% market share of all searches in the internet. This was almost the exact same level as October.
Coming up a distant second (as usual) was Yahoo! (NASDAQ: YHOO) with market share of 22.4%. The next three were Microsoft (NASDAQ: MSFT) at 9.8%, IAC/InterActiveCorp.'s (NASADAQ: IACI) Ask.com at 4.6% and Time Warner's (NYSE: TWX) AOL at 4.5%. In November (a seasonally weak month for web searches), U.S. web searchers conducted 10 billion searches -- a 5% decline from October.
Do these rankings surprise any web surfer? They shouldn't -- Google continues to dominate internet searches and Yahoo!'s Project Panama -- although technically a job well done -- is probably too late to the party to put any significant pressure on Google. Microsoft's Live Search push has garnered it about the same market share as in the past (a decent third place). The power of first-mover advantage is quite evident in Google's placement, and I'd suspect it's not going anywhere soon.
IAC InterActive (NASDAQ:IACI)'s Ask.com has about 5% of the U.S. search engine market -- not much.
But the internet property is going to try to go against the trend. Instead of taking data from customers to target ads, Ask.com will let users "hide" their search data to promote privacy. The company is launching "AskEraser," which will destroy all personal information about a user.
According toThe New York Times, unlike typical online privacy controls that can be difficult for average users to find or modify, people will be able to turn AskEraser on or off with a single click."
The privacy police will probably be very happy about the announcement. But it takes a big targeting tool away from Ask, and Ask can use all the help that it can get. It has tried and tried but has had no success in prying search share from Google (NASDAQ: GOOG) or Yahoo! (NASDAQ: YHOO).
The move by Ask is based on the premise that most people care if search engines collect data on them to better target search results and advertising. Since very few people opt out of programs that collect data online, the answer is that almost no one gives a damn.
Douglas A. McIntyre is an editor at 247wallst.com.
Shares sold short in Google (NASDAQ: GOOG) rose 56% in June compared to the May figure to hit 6.2 million.
The reason may be as simple as the nearly 10% rise in the company's shares over the last month. In the two months prior to that, the search giant's shares rose very little.
Stumbles at rival Yahoo! (NASDAQ: YHOO) and increases in Google's market share as seen in data of major research firms including HitWise and comScore have added to the market's perception that the firm's presence in search is so large that rivals have absolutely no chance of catching it.
But big growth almost always comes with some level of uneasiness. At $530, the stock is near an all-time high. While the company's revenue has recently grown over 60%, some analysts wonder when the increases in search-based text ads will start to come back to earth as it did in online display advertising started about two years ago.
The short position indicates that there are some who are willing to bet that Google's slower growth is nearer than that market expects.
For a long time now, when it comes to search engines, Google Inc. (NASDAQ: GOOG) has been the king of the hill, and a new survey shows that Google extended its lead once again during August, taking valuable traffic away from its main competitors Yahoo (NASDAQ: YHOO) and Microsoft (NASDAQ: MSFT).
It looks like Skype is not the only 
For the most part, I've been an avid user of 
and 
. He is also the founder of 
There have been concerns that the rate at which people clicking on the text ads next to 
All eyes will be on 
The deal for 
Google's
Steffen Mueller's past gig was as a product manager at 
Should you sell into today's rally? Yes, if you think there are more surprises to come (I do)
The week in preview: Mulling over techs, financials
'Crash-and-burn economy?' 'Bailout beer bust?' What should we call America's economic disaster?
