Did Google Just Gag?

Google (Nasdaq: GOOG  ) is going backward.

From December to January, the search king returned a sliver of market share to rivals Yahoo! (Nasdaq: YHOO  ) , Microsoft (Nasdaq: MSFT  ) , and Time Warner's (NYSE: TWX  ) AOL. IAC's (Nasdaq: IACI  ) Ask.com network, meanwhile, also lost share. The details:

Search Engine

Dec. 2008 Share

Jan. 2009 Share

Change

Google

63.5%

63.0%

(0.5)

Yahoo!

20.5%

21.0%

0.5

Microsoft

8.3%

8.5%

0.2

AOL

3.8%

3.9%

0.1

Ask Network

3.9%

3.7%

(0.2)

Source: ComScore.

Should investors be nervous? Perhaps, but this isn't the data that matters most to me as an investor. Search advertising, on the other hand, is very important. If data shows that fewer marketers are turning to search, Google has a problem.

Fortunately, analysts don't see that happening soon. They're predicting 15% growth for Google's search advertising business in 2009, reports BusinessWeek. What's more, Big G is still by far the biggest player in search, and it's investing to improve results with tools such as Voice Search on the iPhone.

But Yahoo! has gained search market share for five consecutive months. You read that right. The would-be bride in the Microhoo shotgun wedding that never was, a scary stock if ever there was one, has seen its U.S search share rise from 19.7% in August to 20.5% in December, with incremental gains made each month, reports Silicon Alley Insider.

If there's good news here for Google investors, it's that the report comes just as upstart TradeComet has sued Google for alleged antitrust violations. Lagging search market share can't help its case.

Everyone's been aiming for the Big G for years. Mostly, those shots have missed. Until now. Watch your back, Google.

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Google is a Motley Fool Rule Breakers recommendation. Microsoft is an Inside Value pick. Try either of these Foolish services free for 30 days. There's no obligation to subscribe.

Fool contributor Tim Beyers had stock and options positions in Google at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. The Fool’s disclosure policy, on the advice of counsel, declines to comment under the protections afforded it under the Fifth Amendment.


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 20, 2009, at 9:18 AM, Kevinjump wrote:

    but you can prove anything with statistics,

    While Google lost 0.5 of the market share, the number of searches on Google increased by 6%. they are still growing just slightly slower than yahoo (this month)

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