Is Yahoo Gaining on Google?

Oct. 23, 2007 9:27 AM ETAABA, GOOG12 Comments
Wayne Mulligan profile picture
Wayne Mulligan
4 Followers

Google (Nasdaq: GOOG) has been knocking the cover off the ball for the last three years – showing increasing revenues, profit margins and market share gains, quarter over quarter.

The company can't be stopped ... or can it?

The company that really started it all, Yahoo! (Nasdaq: YHOO), is on a mission to topple the search giant and reclaim its crown as the king of the Web.

Some people are skeptical. They think that Yahoo! (YHOO) just doesn't have what it takes to reach the scale and success of Google (GOOG) in the search advertising business.

But this writer thinks that "some people" are wrong. Let me tell you why:

First, in a recent study by Compete.com, Yahoo! has shown to consistently get higher click through rates on its search results. Meaning, if you go to Yahoo! and type in a search term, you're more likely to find a result that strikes your interest than on Google. This essentially means that Yahoo!'s search results are getting to be more relevant than Google's.

Now if this study is accurate and Yahoo! can start delivering better search results, the company will also start to get a larger share of the search market, which means a larger share of the search advertising business.

And while Yahoo! continues to gain a larger share of the search advertising market, the company is also monetizing its searches better with its new Panama program. This was Yahoo's response to Google's successful AdWords program that has made it the runaway success story of this decade.

Is Yahoo! a Buy Right Now?

As far as buying the stock right now, I still see some risk.

For one thing, Google isn't a competitor to be taken lightly, as we all know how well they've executed in this space.

This article was written by

Wayne Mulligan profile picture
4 Followers
Wayne is the Founder and CEO of TickerHound.com - a finance and investing education site that seeks to educate and empower individual investors. He last served as the Chief Investment Officer and Director of Web Strategy at Tycoon Publishing. Before joining Tycoon Publishing, Wayne worked at Gilford Securities in New York, where he co-managed assets and was known as one of the premier technology analysts on Wall Street. Prior to joining Gilford, Mr. Mulligan co-founded and operated an Internet consulting firm, ISI Studios. ISI Studios specialized in backend software development and Internet marketing with a focus on the entertainment and media industries. Mr. Mulligan began his career in technology at BPS SoftWare where he was responsible for developing and maintaining a number of award winning America Online add-in applications. He graduated from Columbia University with a degree in East Asian Studies

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