Eight Search Engine Stocks to Answer All of Your Questions

With all the hype surrounding the attempted takeover of Yahoo! by Microsoft, maybe it is time to take a look at several of the publicly traded search engine companies.

Yahoo (YHOO) is one of the most popular search engines on the Web based on unique visitors, topping out at about 130 million uniques per month, and around 3.4 billion page views per day on average. It recently turned down a takeover offer from Microsoft at $31 per share. By the way, did you know that a year ago, a Korean blog predicted that Microsoft would take over Yahoo? The latest quarter's revenues for Yahoo were up 7.6%, but earnings were down 23.4%. The stock has a P/E ratio of 60.

Although it's a very small portion of its business, Microsoft (MSFT) does have its own search engine through MSN.com. It had an almost 3% share of the search engine market in December 2007, according to a report by ComScore (SCOR). Microsoft also owns msdewey.com. It has a P/E of 16, a PEG of 1.32, and pays a yield of 1.6%.

Google (GOOG) is by far, the largest search engine in the world, with over 62% of the market share of total searches. Its earnings for the latest quarter were up 17% on a revenue increase of over 50%. The stock has a P/E of 38.

The Chinese Internet search engine Baidu.com, Inc. (BIDU), is now in third place by number of searches, according to ComScore. The company, which was founded in 2000, has a P/E of 96 and a PEG of 1.

Time Warner Inc. (TWX) owns AOL, which used to have a big market share, but in terms of search engine searches, it now has less than 2% of the market. Time Warner has a P/E of 14, a PEG of 1.12, and pays a yield of 1.5%.

Ask.com is owned by the Oakland, California based IAC/InterActiveCorp (IACI). Ask has slightly over 1% of the market share of searches. IAC has a forward P/E of 12, and a 0.93 PEG.

InfoSpace Inc. (INSP) has several search engines including Dogpile.com, InfoSpace.com, Webcrawler.com, MetaCrawler.com, and Zoo.com. The stock has a P/E of 20.

Amazon.com (AMZN) owns the search engine A9.com, which utilizes Live Search. Amazon has a P/E of 64.

Disclosure: The author owns TWX and MSFT.

Comments

[oceandude:]

Why do you list current P/E for all of these except forward P/E for IACI?

2008 Feb 25 11:37 AM

[jurgen:]

Your info about share of searches is incorrect...aol and ask in paticular have more than 4%

Google U.S. Search Share Up A Tad To 58.5% In January
Posted by Eric Savitz

Google’s (GOOG) share of the U.S. search market stood at 58.5% in January, up a tad from 58.4% in December, according to comScore.

Yahoo’s (YHOO) share fell to 22.2%, from 22.9%, while Microsoft’s share was steady at 9.8%.

AOL’s (TWX) share improved to 4.9%, from 4.6%, while ASK (IACI) moved up to 4.5%, from 4.3%.

2008 Feb 25 02:18 PM