Google Bites Microhoo Yet Again

Microsoft (Nasdaq: MSFT  )  might need a lot more than just Yahoo! (Nasdaq: YHOO  ) to take on Google (Nasdaq: GOOG  ) .

Nielsen Online data confirms both Yahoo!'s and Microsoft's gradual path to irrelevance in search, making it seem less likely that the two will be able to take on Big G in the long run.

According to the report, Google's market share in the domestic search engine market continues to grow, at the expense of the fading silver and bronze medalists.

Jan.

Feb.

Google

56.9%

58.7%

Yahoo!

19%

17.6%

MSN/Live

12.1%

11.2%

AOL Search

4.7%

5.2%

Ask.com

2.4%

2.5%

Source: Nielsen Online.

In other words, in the span of one month, Google's market share has grown from 56.9% to 58.7%, while Microhoo's combined stake has shrunk from 31.1% to 28.8%. It would have needed to acquire IAC's (Nasdaq: IACI  ) Ask.com to stop the organic bleeding, or make a pricier purchase of Time Warner's (NYSE: TWX  ) AOL, to keep pace with Google.

If a Yahoo!-Microsoft combo was good enough to reach Google's armpit a month ago, it's now closer to its belly button. Any lower, and we'll have to move this analogy over to an adult website.

This is clearly a race that Microsoft won't win, especially if it's hitching its horse to the only other search engine within the top five to join it on the downslide. This is even before we turn to the global playing field, where Microsoft actually trails China's Baidu.com (Nasdaq: BIDU  ) by a fair margin for the bronze.

Numbers fluctuate monthly, but this clearly does not bode well for either company, especially heading into next month's quarterly report from Yahoo!, where the potential carnage could wind up being a dealbreaker.

One may also speculate that sour impressions of Yahoo! and Microsoft combining forces -- a deal that was announced at the end of January -- may be weighing on actual usage.

Search engine stats are important because this is where the fat online advertising margins come to party. Most of the other page views in cyberspace are tough nuts to monetize, explaining why Microsoft and Yahoo! generate far less in ad revenue than Google.

So, go figure: That fat Google kid keeps stealing Microhoo's lunch money. What a bully!

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