Unless you already have a major foothold in the search engine market – or an amazing, disruptive technology that can make the world take notice – there isn't much point in staying. Competing with Google (NASDAQ: GOOG) is hard enough, even when you're Yahoo (NASDAQ: YHOO) or Microsoft (NASDAQ: MSFT) ... and, apparently, when you're IAC/InterActive Corp (NASDAQ: IACI). Barry Diller is ready to give up Jeeves, but only if asked nicely.

Diller's presence in the search space is Ask.com, ranked #4 behind Google, Yahoo and Microsoft's Bing. With a substantial gap between first and second, fourth barely registers at all. Ask.com has only a 2% U.S. market share, according to Hitwise, more than 60 percentage points behind the industry leader.

The number two search engine in the United States turned in a fantastic third quarter, far ahead of expectations. Cost-cutting, layoffs and business divestitures led to a surge in Yahoo's (NASDAQ: YHOO) profits and a 4.8% increase in share price in extended trading on Tuesday evening. Net income more than tripled to $186.1 million (13 cents per share) from the third quarter of 2008's result of $54.3 million (4 cents a share). Sales (exclusive of fees passed to partner sites) reached $1.13 billion, slightly above the $1.12 billion expected by analysts, according to a Bloomberg survey.

With the advertising market in rough shape and competition from Google (NASDAQ: GOOG) continually rising, Yahoo refocused on its core properties: the home page, messaging and mobile services. The company trimmed what it didn't need, which is why it was able to boost its earnings even with a decline in revenue. Increased ad revenue from auto manufacturers, travel companies and consumer product manufacturers also helped.

Yahoo's chief financial officer, Timothy Morse, says that the company's markets are "starting to stabilize." Of course, Yahoo itself must be doing something right: its share price is up 41% this year.

Some people join wine-of-the-month clubs. There are plenty of other programs out there, too, where your credit card is hit every month, and your purchase is sent to you directly. If only such programs were available for Google (NASDAQ: GOOG). . . .

The company's CEO, Eric Schmidt, said Wednesday that Google plans to pick up a small company a month as a way to get its acquisition head back in the game. With the worst of the recession behind us, Google believes, this is a great way to get moving.

Google (NASDAQ: GOOG) isn't invincible. The search and online ad giant is expected to report lukewarm growth for the second quarter today because of a brutal market for advertising and redoubled efforts by Microsoft (NASDAQ: MSFT) to own a bit more than its meager share of the online market.

Good news would have to come in the form of a better mousetrap for growing Google's ad market and ways to keep the Redmond machine from tripping it up. Ultimately, analysts are looking to see how Google can get back to the double-digit growth that used to be a given.

Yahoo Inc (NASDAQ: YHOO) claims not to be under pressure to ink a search deal with Microsoft (NASDAQ: MSFT). You know what that means ...

The two distant followers in the search engine space were considering a partnership, but Microsoft's newly released Bing search engine raises questions as to how committed Microsoft would be to a deal. Yahoo CEO Carol Bartz was quick to explain, according to Reuters, that "Yahoo doesn't have to do anything with Microsoft about anything" and that it is "a damned big, important site."

The benefits of the deal are salient, mostly involving scale and increased monetization of Yahoo's search service. The second largest search company estimates that it would save up to $700 million in a year through the Microsoft partnership.

Even though Yahoo is "damned big," Bartz believes that the acquisition of smaller companies that could be folded easily would be a good use of the company's cash.

Back on tax day, my friend and colleague Elizabeth Harrow wondered if Yahoo! (NASDAQ: YHOO) would announce job cuts when it reports earnings tomorrow. Ms. Harrow looked at a report in The New York Times about preparations for a "significant round of layoffs" and then took a look at the option activity on the Internet search portal a week ahead of earnings.

Something that Elizabeth noted was the fact that the 15 strike was going to assume the mantle of peak call open interest when the market opens for trading festivities today. This level could be a major sticking point for the stock, as Yahoo hasn't closed atop the $15 level since late 2008.

Google, Inc. (NASDAQ: GOOG) reported Q4 numbers on Thursday after the market closed up for the day. Revenues increased 18% to $5.7 billion and GAAP income fell by a lot, coming in at $1.21 per diluted share versus $3.79 per diluted share in the year-ago period. However, after adjusting for various charges, the bottom line comes out to $5.10 per diluted share. Referring to the Before the Call piece, I see that this performance was good for growth of 15% and was good for a beat of analyst views by $0.15.

Not bad. Google may not be growing like it used to do in the old days, but I thought its Q4 came out pretty good, all things considered. Operational cash flow for the year increased by 36% (gotta love that). Free cash flow for the year was nearly $5.5 billion. As can be seen, Google held up well during the difficult climate, as its online ad model apparently was healthy. However, I have to point out something that I'm not a huge fan of: management is exchanging worthless employee options for fresh ones. Uh, what's the point of stock options in the first place? Aren't they supposed to be financial incentives for employees? What can you do, I suppose, but this is why I sometimes wish that options as compensation would just go away.

So, Google is holding up, and it beat estimates. Even though the stock has perked up as of late, I'm not inclined to buy it at these levels. I certainly wouldn't buy it on today's modest rally of 5.5% (that was the stock's performance as of this writing). Google is the giant in search, and it offers tough competition to Microsoft Corporation (NASDAQ: MSFT) and Yahoo!, Inc. (NASDAQ: YHOO). But I think the next several quarters could be tough for the tech entity, and I'd rather get more data before deciding what to do with Google as a potential investment idea. I just don't feel in a rush to do anything about the stock currently.

Disclosure: I don't own any company mentioned; positions can change without notice.

It used to be that the premier advertising medium in the US could keep its place on top for a generation or more. Now that cycle has been cut down to years. Newspapers ruled the American market for more than a century. Radio was dominant for almost five decades. TV pulled ahead in the 1950s and 1960s followed by cable.

In just the last decade the internet has become the "hot" place for advertisers to put their money. First that investment went into big web portals like AOL. Then the flow of money moved to search engines with Google (NASDAQ: GOOG) out in front. It developed the reputation as the most efficient way to reach a multitude of markets and that built it into one of the most valuable companies in the world, based on market cap.

As Microsoft (NASDAQ: MSFT) gets ready for another round of talks with Yahoo! (NASDAQ:YHOO) about buying its search business, the news that CEO Steve Ballmer killed two chances to get into search several years ago has emerged.

While there is some chance that the new chief of Yahoo! may elect to keep the portal company's search business, there is little reason not to at least hear Microsoft's latest offer.

Ballmer had the opportunity for MSFT to build online search empire almost ten years ago. According to The Wall Steed Journal, "In 2000, before Google married Web search with advertising, Microsoft had a rudimentary system that did the same, called Keywords, running on the Web. Advertisers began signing up. " For reasons that are hard to fathom, the world largest software company thought that an ad business built on search could hurt revenue from its other businesses. Microsoft also had the chance to buy a relatively small search company and passed.

News reports are emerging that the search for a Yahoo! (NASDAQ: YHOO) CEO is coming to a close.

According to The Wall Street Journal, "Among candidates still under consideration is Carol Bartz, the former chief executive officer of Autodesk. a publicly traded company that builds design software used in engineering." But that is purely a guess.

The issue over who is chosen is not as important as what the person does in the first few months. Perhaps the primary goal would be to keep key executives from walking out the door. Because no one has articulated what the internet portal's long-term plans are there is little reason for people who can get other jobs to stay.

The first option for the company might be to sell its search business to Microsoft (NASDAQ: MSFT). Redmond may no longer be interested, and Yahoo! would be giving up its one strategic asset--that it is No. 2 in search behind Google (NASDAQ: GOOG). Without that, it is just another website.

Google (NASDAQ:GOOG) and Yahoo! (NASDAQ:YHOO) still want their deal for the large search engine company to sell search advertising for the large portal company. Yahoo! knows that Google's system for selling these ads is more efficient. Yahoo! should make more money under the arrangement.

But, almost every large advertiser in the US and Google's competitors want to block the partnership. They don't want Google to have broad pricing power over search. It has about 65% of the market and Yahoo! has another 20%. According to The Wall Street Journal, "Advertisers have told Justice Department officials that the partnership will limit competition, raise prices and reduce choices."

The Justice Department, which has to review whether the deal works under antitrust laws, is getting itchy.

So, what happens? If Google has any sense, it will throw Yahoo! under the bus and walk away. Google stands to get in real trouble with Justice if the government decides to look at the company's share of search even without the Yahoo! deal. It is better off leaving quietly. Google is not likely to make a huge amount of money from selling ads for Yahoo! since the money will be split between the two companies.

Yahoo!, which is struggling to improve revenue and with its stock near a 52-week low, needs the new sales from Google. And, if the larger company exits the deal, Yahoo! has a major problem.

Douglas A. McIntyre is an editor at 247wallst.com