Yahoo! Searches for Better Results

Yahoo!'s (Nasdaq: YHOO  ) unveiling Wednesday of its new instant result Web search tool dubbed "Search Direct" was met with a collective yawn by investors. It's another game of catch-up for Yahoo!. Google (Nasdaq: GOOG  ) already released its Google Instant search to help its users get faster search results. However, Yahoo! has thrown in some innovative wrinkles that might even impress those who didn't know Yahoo! was still even in the search business. A search for Washington Capitals star forward Alex Ovechkin returns his statistics, a picture, and links to his Yahoo! Fantasy Sports data. This information all flashed on my screen by the time I typed "Alex Ov."

Sure, Google could easily match or innovate beyond this technology, but Google also doesn't have the leading fantasy sports site in the world.  For example, Yahoo! still demands more eyeballs than any sports site on the Internet including ESPN.com. So a Google search by sports fans would in many cases send users right back to Yahoo!'s site. Yahoo! could also find ways to attract users by linking Search Direct with many of its other services, such as its leading Yahoo! Finance site.

Yahoo! has continued to lose search traffic not only to Google, but also to Microsoft's (Nasdaq: MSFT  ) Bing. Coincidentally, it is Microsoft's technology that is driving Yahoo!'s search results after the company turned over the business to Mr. Softy about two years ago. Google's search engine handles more than 65% of all search queries, while Yahoo! now only commands about 16%, and Microsoft is on its tail with 13% of U.S. search queries.

I'll be the first to admit that investors in Yahoo! should be a lot less worried with how Yahoo!'s own properties perform than how its Asian investments, particularly Alibaba are faring, but what if Yahoo! actually began to draw more eyeballs to its site through search?

Yahoo! executives admit the new tool needs some fine-tuning, but I am impressed that Yahoo! is creating some innovative tools that have the potential to increase traffic to its core sites. I don't think Google has to worry about Yahoo! stealing significant search market share anytime soon, but that is not the point. Search Direct is a tool that could help Yahoo! function as a more important portal for the Web and particularly its own valuable core sites.

Andrew Bond owns no shares in the companies listed. Google and Microsoft are Motley Fool Inside Value selections. Google is a Motley Fool Rule Breakers picks. Yahoo! is a Motley Fool Global Gains selection. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Google and Microsoft. You can follow Andrew on Twitter @Bond0 or on his RSS feed. Try any of our Foolish newsletter services free for 30 days. The Fool has a disclosure policy.


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  • Report this Comment On March 24, 2011, at 9:03 PM, lslppf wrote:

    Under the agreement, Yahoo will be at the main station and the United States and Canada search results put Google ads on partner sites, Yahoo has the right to decide to put in

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