Bing and Google Gang Up on Yahoo!

Yahoo! (Nasdaq: YHOO  ) just can't seem to catch a break.

Internet-traffic watcher comScore is putting out fresh data on search-engine market share for the month of February, and the Yahooligans are taking yet another step back.

Once again, Yahoo!'s loss is the gain of Microsoft's (Nasdaq: MSFT  ) Bing and Google (Nasdaq: GOOG  ) -- with IAC's (Nasdaq: IACI  ) Ask.com and AOL (NYSE: AOL  ) far removed from medal contention.

Site

Feb. '10

Jan. '10

Feb. '09

Google

65.5%

65.4%

63.3%

Yahoo!

16.8%

17.0%

20.6%

Bing

11.5%

11.3%

8.2%

Ask.com

3.7%

3.8%

4.1%

AOL

2.5%

2.5%

3.9%

Source: comScore.

The results shouldn't surprise anyone. Bing has been gaining momentum since replacing Microsoft's effective yet personality-deficient Live Search. The world's largest software company has been aggressively marketing its edgy portal, to apparent success.

Market leader Google keeps inching higher, despite Bing's growth spurt. There's certainly room for more than one grower, since all they have to do is carve up the shells of Yahoo! and AOL.

And what about AOL? Time Warner (NYSE: TWX  ) spun off its fledgling online appendage a few months ago. The move shines a brighter spotlight on AOL's search division, especially at a time when America Online's access subscribers and online advertising continue to fall. If search is where it's at -- and Google's success bears that out -- AOL needs to do a better job there.

Barry Diller's Ask.com isn't fading away at the same pace as Yahoo! and AOL, which makes its modest decline over the past year a relative victory. It's not much of a threat to Google or Bing, but it may make IAC a compelling buyout target for Yahoo! or Microsoft in their efforts to make up the gap with Google.

This naturally leads us to Yahoo!, where market share has been a serial sinker since the company agreed to outsource its search to Bing. Yahoo! still generates a ton of traffic throughout its portal, but remains challenged to convert traffic into advertiser leads.

March's data should be more of the same. If Yahoo! or AOL don't see the desperation in their gradual fade, they should at least get their eyes checked. They're going to need new glasses as Google -- and eventually Bing -- get even farther away.

Are you buying Internet stocks these days? Which ones? Why? Share your tips in the comment box below.

Microsoft is a Motley Fool Inside Value pick. Google is a Motley Fool Rule Breakers selection. Motley Fool Options has recommended a diagonal call position on Microsoft. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz is a huge fan of all portals and search engine. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.


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