Yahoo and Microsoft and their slipping share of search

Nielsen Online released its U.S. search share rankings for August this morning. Depending on your point of view, the failure of the Microsoft bid for Yahoo may have been a blessing, at least in the short term. Yahoo Search handled 1.3 billion queries in August, down 16.5 percent year over year, and representing 18.1 percent of all search requests in August.

And Microsoft? Even worse, and coming off a smaller base no less. The software behemoth processed 770,592 queries in August, down a considerable 23.8 percent from the same time last year. Microsoft’s share of search stood at 10.7 percent last month.

And Google. Oh, it handled 4.3 billion queries, up 3.1 percent from August 2007, making its market share 60 percent of the 7.2 billion queries generated last month.

Perhaps one of Docu-Drama’s readers can explain why Yahoo’s price-to-earnings ratio still is the highest of the three at 41, which is about 45 percent higher than Google’s at 28.

As for Microsoft, its on the bargain aisle at 13, less than half the price of Google. Microsoft just announced a new $40 billion share buy back program today, and with its rare triple AAA rating from Standard & Poor’s, the company is going to take advantage of the paucity of strong corporate debt offerings by issuing up to $6 billion of its own. It also boosted its dividend 18 percent from 11 cents to 13 cents per share, giving it a dividend yield of about 2 percent.

Among the Lilliputian’s of search, the best gain was produced by AT&T Worldnet Search, which tripled the number of queries it handled in August — to 30,272, which worked out to 0.4 percent of all searching done via the Internet for the period.


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