Google Inc. (NASDAQ: GOOG)'s ambition is to become the dominant advertising network across all mediums globally, which is one high mountain to climb. The company has built up a multibillion-dollar cash pile to help it on its quest, and it is in control of the world's internet search market as well as the most-used video-sharing site.

It is dabbling in radio, print, and mobile industries heavily as well. The goal: to take a small cut of each advertising transaction or impression throughout all media forms.

If Google is successful, the company could experience growth way beyond the incredible numbers it's now seeing every quarter. To get there, the company is trying to ensure existing and potential advertising partners know that controlling ad campaigns and directing marketing resources as efficiently as possible would be much easier if there was a central "dashboard" to manage all those ads across all markets and all mediums.

Ever since I was a kid, I've always rooted for the underdog. As a Philadelphia sports fan, you have to be that way or else you will go insane. That's why I've always had a soft spot for Yahoo! (NASDAQ: YHOO).

When others argued that the portal was doomed, I took the contrary position figuring that as more advertising dollars shifted online, the company would get more than its fair share. I figured that Project Panama would make Yahoo's search business at least marginally competitive with Google Inc.'s (NASDAQ: GOOG). Boy, was I wrong. The company's search business continues to suck wind as it loses audience to social networking sites such as MySpace and Facebook. BusinessWeek points out that Yahoo is trying to go back to its geeky roots. While an admirable goal, it may be too little too late.

That thumping sound you just heard was me along with countless others jumping off the Yahoo bandwagon. For the past few months, Yahoo has been sputtering along aimlessly trying to yet again reinvent itself through its 100-day review. Judging from the market's reaction, investors don't have much faith that Jerry Yang and Sue Decker are going to come up with anything groundbreaking. Shares are down $1.01. or 3.6%, to $26.85 ahead of the release of earnings after the close of trading today. They have plunged about 15% over the past six months.

About the only thing that might move the stock is an announcement that it outsourced its search business to Google or that it's considering strategic alternatives including a sale of the company. Yahoo continues to provide good content and knows how to engage users, which would make it a good fit with Microsoft Corp.'s (NASDAQ: MSFT) MSN.

Today's earnings conference call will be lively.

Google (NASDAQ:GOOG) has been a target for a number of internet privacy groups who feel that it keeps personal data on users for too long. Google argues that having the data helps deliver better search results. Plus, the company decided to cave into pressure and agreed to keep data on individuals no longer than 18 months.

Now, Google want to be out in front of the drive for Internet privacy. It is an unlikely about face, but it is one nonetheless. According to the Financial Times, Google is "calling for new international laws to be set up to protect personal information online." It wants a body like the UN to draw up the rules.

Google's position is clearly one that it would rather not be forced to take, but it is making the best out of a bad situation. Clearly, the more data a search engine has, the better the results. This allows for better text ad targeting and better profits. Now that Google has purchased DoubleClick the use of data collected from users is even more important to get good results for display ads.

But, Google has to protect its image and so instead of just going along, it will lead the parade.

The company may figure that if it take a central position in drafting new rules so that it can at least slant them a bit to its advantage. It is not being helpful for nothing.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Google (NASDAQ: GOOG) is betting that search on wireless handsets will become a big business. The company understands that online search on the PC platform cannot grow at its current rate forever, so, at some point, revenue from its AdWords program will begin to flatten.

To combat the potential of a less robust growth environment on the web, Google is moving Adwords onto its Google Mobile Search product. The program will be free until November and ads will only run on websites designed for handset screens.

Silicon Alley Insider points to a recent survey by research firm Kelsey Group as the reason Google is so anxious to get a foothold in the new market. "Revenue from U.S. mobile search advertising will soar from $33.2 million this year to $1.4 billion in 2012."

Google has some potholes in its path. After being handily beaten in the PC-based search market, Yahoo! (NASDAQ: YHOO) and Microsoft's (NASDAQ: MSFT) MSN Live Search are working to get their products on as many handsets as possible. However, they still have the disadvantage that their search products do not produce results as good as Google's and their text ad targeting products are inferior.

In moving to the mobile platform world, Google maintains its critical edge.

According to the Wall Street Journal, Yahoo! (NASDAQ: YHOO) gave serious consideration to outsourcing its search function to either Microsoft (NASDAQ: MSFT) or Google (NASDAQ: GOOG). The paper writes: "Such a move would likely give Yahoo an immediate revenue bump representing hundreds of millions of dollars annually, because Google, for one, generates about 40% more revenue for each consumer search than Yahoo! ..."

Yahoo! has spent a huge sum on developing its own Panama technology to improve its competitive position with Google, but there is not much evidence that this program has worked well. Another quarter or two of bad results could send Yahoo! back to Google to pick up the additional revenue.

The idea that Yahoo! would turn to a rival for its key search function shows how badly off the company is and how little management may be able to do about it. When Yahoo! decided not to make search a major part of its business, before Google had become a big company, it sealed its fate as a display advertising company, but the display market is no longer growing quickly.

Not matter how much pride Yahoo! would have to part with to set up a partnership with Google for search, it should do so. It needs the revenue and Wall Street needs a revival of the stock.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Google Inc. (NASDAQ: GOOG) today disappointed investors. I'm sure that geeks from Cambridge to Silicon Valley are wondering if the world has come to an end. Let be the first to say this isn't the end of the world. In fact, it's a good way to remind people that Google is mortal.

In fact, the company's earnings were still great even if they weren't as fantastic as some had expected. Net income soared to $925.1 million, or $2.93 per share. Revenue rose 58 percent to $3.87 billion. Excluding stock-based compensation costs, profit was $3.56, about three cents below expectations. Revenue excluding so-called traffic acquisition costs was $2.72 billion, below above the $2.68 billion, analysts had expected, according to MarketWatch.

Though I'm not sure where things went wrong in this quarter, it's worth remembering that Google itself has repeatedly said growth was slowing. Its repeatedly mentioned that it plans to pour big money into the busines and that it doesn't care much about meeting quarterly numbers.

I wonder if anyone listened.

The on-again off-again merger talks between Microsoft Corp. (NASDAQ: MSFT) and Yahoo Inc. (NASDAQ: YHOO) are off again, according to The Wall Street Journal.

It isn't clear when the talks, which were first reported by the New York Post, restarted and when they stopped. Still, Microsoft and Yahoo! may join forces on some level. "The two companies may still explore other ways of cooperating," the Journal said. indicating that the two companies understand that they need one another.

Microsoft is betting that its adCenter platform will help it gain traction against Google Inc. (NASDAQ: GOOG). Yahoo! expects big things from Project Panama. Separately, they don't stand much of a chance taking marketshare from the search engine giant. Together, they stand a chance.

Microsoft CEO Steve Ballmer and his counterpart at Yahoo!, Terry Semel, know this very well. Combining the two companies makes sense on many levels.

So why hasn't this happened yet? Do the companies think that joining forces will be an admission that their strategies have failed? Also, even a huge company such as a combined Microsoft-Yahoo! isn't big enough for Ballmer and Semel.

They can't continue on the road that they have traveled. Some change in direction is needed. It's a question of what and when.

The latest weekly report from HitWise shows Google Inc. (NASDAQ:GOOG) with over 60% of the US search market. Thirty-eight of the analysts who cover Google have a buy rating or better on the stock. But, according to Bear Stearns, Google's hyper-growth is slowing. Search queries were up 29% in March, but a year ago, that number was 50%.

In the face of all this data, The Wall Street Journal wonders whether investors are putting their expectations for Google earnings, which are going to be released today, too high.

Probably not.

Google still has to earn its tremendous valuation. The company's shares trade at almost 14 times trailing revenue. For Yahoo! Inc.(NASDAQ:YHOO), that number is less than 6x. At eBay Inc. (NASDAQ:EBAY), the figure is about 8x.

None of this is to say that Yahoo! and eBay are not fairly valued. But Google carries a premium of almost 100% when market cap to sales is the measurement. It has to keep growing at the anticipated rate of about 70% year-over-year to keep that premium.

So, when Google reports earnings, expectations will be too high. But, they should be. Google has managed to beat "too high" before.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Yahoo! Inc. (NASDAQ: YHOO) today posted disappointing first quarter earnings. Chief Executive Terry Semel is in deep trouble.

The no. 2 search engine had net income of $142 million, or 10 cents per share, compared with $160 million, or 11 cents. a year earlier. Revenue rose 7 percent to $1.67 billion. Excluding payments Yahoo makes to partners, revenue was $1.8 billion. Analysts had expected profit of 11 cents and sales excluding so-called traffic acquisition costs of $1.21 billion, according to Thomson Financial.

Of course, shares fell in after-hours trading.

What can be said about the Sunnyvale, Calif.-based company that hasn't been said a thousand times before? The company is losing ground to Google Inc. (NASDAQ:GOOG) and needs to regain the confidence of Wall Street. I just don't see how Semel is going to survive.

The love-hate relationship between Wall Street and Yahoo had recently swung to the positive side. Yahoo!'s fans, including me, argued that once Project Panama got off the ground, the turnaround would begin.

RBC Capital Markets analyst Jordan Rohan, who rates Yahoo as outperform, summed up the situation well to Bloomberg News.

``Investors have confused the initial success that Yahoo has had with Panama with the overall company performance,'' he said. ``The company clearly is still in transition.''

If the current tussle between Google Inc. (NASDAQ:GOOG) and Viacom Inc. (NYSE: VIA) is really a business negotiation as Google CEO Eric Schmidt argues (and I agree with him), then two companies will now have more to discuss.

Viacom chose Google rival Yahoo! Inc. (NASDAQ:YHOO) for a multiyear search advertising deal on almost three dozen Viacom web sites. Though this won't make much of a dent in Google's overwhelming market dominance, this deal is too important for Google to ignore.

Yahoo! has the option to extend that agreement to include search activity and text advertising all Viacom's properties, which includes an additional 140 sites. That's more than 175 sites that Yahoo! could be displaying relevant text ads on -- the same magic formula that Google has employed to build itself into being the kingpin of all online advertising.

The numbers do hold some pretty decent figures, though. Traffic to Viacom's Nickelodeon website (www.nick.com) and ComedyCentral.com each had roughly 10 million unique visitors in March. Add a few more top-performing websites into that mix and Yahoo!'s presence in serving text ads at those properties starts to look significant, yes?

Comcast Corp. (NASDAQ:CMCSA) is unhappy with the search advertising deal it has with Google Inc. (NASDAQ:GOOG) for its broadband portal and is chatting up Microsoft Corp.'s (NASDAQ:MSFT) MSN service, according to the Wall Street Journal (subscription required).

The no. 1 cable company is unhappy with the terms of its current deal with Google and wants a larger share of the advertising revenue, the paper said, adding that Comcast.net is one of the biggest sources of Google search queries from outside the company.

There's isn't anything unusual about the Comcast-Google situation. I'm sure Google is involved in lots of contract negotiations like it. What's weird is that the Comcast dispute got publicized. Why Comcast trying to send Google a message via the Journal?

Though this deal isn't significant for the bottom line of any of these huge companies, it's worth monitoring. My colleague Tom Taulli correctly points out that Google is starting to show vulnerabilities and that search has the potential to become a commodity.

Google doesn't want to give up traffic to any competitor, especially MSN. Microsoft is probably the only company that can break the zen-like calm of Google's management.

The Philadelphia-based company wants to boost its Web presence, which includes sites like Eonline.com, as competition for television and broadband internet services heats up. Microsoft wants to establish credibility in search to rebut critics who claim the company is pouring billions into a foolish quest to catch up to Google.

So there's lots of pride and ego at stake here. It will be interesting to see how things work out.

The one thing that I find most infuriating about Google Inc. (NASDAQ:GOOG) is how the company's executives can look people in the eye and deny the obvious.

Take the recent announcement about its plans to sell a suite of software to business customers. Doesn't that encroach on the turf of Microsoft Corp. (Nasdaq:MSFT). Chief Executive Eric Schmidt artfully ducked that question when it was posed by the Associated Press. We don't operate that way," he said. "We are trying to solve very different problems."

No one believed it when he said the same thing about eBay Inc. (NASDAQ:EBAY) when Google Checkout was released. Google would probably answer the question the same way if the AP asked about what threat the bundle may pose to International Business Machine Corp.'s (NYSE:IBM) Lotus unit.

There is some truth to the statement, however, Google's software bundle, which sells for $50 a year, has nowhere near the functionality of Microsoft Office. The same holds true for Google Checkout when compared with eBay's PayPal. Google's offerings though are designed to be used instead of something else, so any talk that the company isn't in competition is laughable.

But before people start pontificating about the threat Google poses to Microsoft, a reality check is in order. Google's product development outside of search hasn't been that impressive. .

Schmidt told the AP that search engine giant priced the software so cheaply to tempt companies to give it a shot. Software doesn't sell based on price alone. Large enterprises demand bang for their buck with functionality and tech support.

Chief information officers know that you get what you pay for from tech companies. Plus, many are reluctant to allow employees to use web-based applications for security reasons.

The companies referenced In Google's announcement got something in return from the search engine giant like free service or keyword advertising. Investors should never take the statements from customers in product announcements seriously.

Chad Hurley and Steve Chen, who founded YouTube, filed plans yesterday to sell 3.2 million shares of Google Inc. (Nasdaq:GOOG) , which acquired the video-sharing service in November. You didn't have to be much of a psychic to see this one coming.

The jury is still out on whether Google overpaid for a company that hasn't made a nickel in profit or made the savviest acquisition in the history business. So far, YouTube seems to be worth the considerable headaches it's causing the Mountain View, Calif.-based company.

Fights over copyrighted material will be worked out. Competitors will emerge, but like with Google they will have a tough time. Once someone's media habits are established, they are really hard to change. A competitive video-sharing site will need to be orders of magnitude better than YouTube if it stands a chance.

But thanks to YouTube, every entrepreneur in Silicon Valley thinks their money-losing venture is worth 10 times more than it was before the Google acquisition was announced. The media hasn't helped much either. A much-derided story in BusinessWeek called "Valley Boys" made the case that every company connected to that awful buzzword Web 2.0., such as the article-rating site Digg, was worth big money.

"So far, Digg is breaking even on an estimated $3 million annually in revenues," the story said. "Nonetheless, people in the know say Digg is easily worth $200 million."

That math may sound dubious and sourcing a bit murky , but that same article said that YouTube "could easily fetch $500 million." That prediction made in August was way off. Three months later, Google bought YouTube for $1.65 billion.

News Corp.'s (NYSE:NWS) MySpace users would be able to buy and sell stuff with each other using eBay Inc.'s (Nasdaq:EBAY) auction site under a partnership being discussed between the two companies, according to The Wall Street Journal (subscription required).

If the deal is finalized, it would be a huge win for eBay, which has been looking for ways to boost the growth of its core auction business. News Corp. benefits by giving MySpace users another reason to spend time on the site when instead of studying or actually interacting with people in the real world. The one company that's not happy about this potential hookup is Google Inc. (Nasdaq:GOOG), the Journal said.

Remember all of the hoopla surrounding the Google-MySpace deal. Well, according to the newspaper it's not been finalized yet. Google probably isn't going to be real keen on any deal that promotes a service that competes against Google Base and Google Checkout.

Though this deal won't derail that deal, it does underscore the complicated relationship between Google and eBay. The companies often -- not very convincingly -- describe each other as partners. A more accurate description is that they are stuck with each other. eBay is one of the largest buyers of keyword advertising on Google. The auction site is dependent on Google for traffic. eBay probably needs Google more than the other way around.

But as I've argued before, reports of eBay's death are premature. Google has had to offer pretty big incentives to merchants to get them to use Google Checkout. Google Base isn't anything special either.

The companies will continue to eye each other like prize fighters in a ring for some time to come.

Google Inc. (NASDAQ:GOOG) proved yet again that Wall Street analysts have no idea on how to forecast the company's quarterly results.

Net income was $1.03 billion, or $3.29 per share compared with $372.2 million, or $1.22, a year earlier. Revenue was $3.2 billion versus $1.9 billion. For what's worth, analysts expected profit of $2.92 on revenue of $2.19 billion, according to Thomson Financial. Shares of the No. 1 search engine rose in after-hours trading.

In the earnings release, Chief Executive Eric Schmidt didn't waste any time touting the company's latest achievements.

"Our impressive performance in the fourth quarter demonstrates the continuing strength of our business model across Google properties and those of our partners," he said. "Our growing organization allows us to deliver ever increasing amounts of information and content to our users both through investments in search and ads as well as through strategic partnerships."

Blogging Stocks readers weren't surprised by these results; out of 369 votes in our readers poll, 59% were for Google to beat expectations

Also check out some other earnings reports that we're following, and let us know what you're expecting.