Google And Microsoft Advance In Search At Yahoo's Expense

by Laurie Sullivan, Jan 16, 2010, 9:39 AM

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Google and Microsoft managed to grab more U.S. search market share at the expense of Yahoo in December. That's the report from research firm comScore, as the earnings season gets underway.

Google rose to 65.7% in December from 65.6%, and Microsoft Bing inched up to 10.7% from 10.3%, while Yahoo continued falling to 17.3% from 17.5%, comScore says.

Bing, which started the upward climb in June at roughly 8%, experienced the most growth. Searches in the U.S. rose 2% in December to 14.7 billion. Google sites accounted for nearly 9.7 billion searches, followed by Yahoo sites at 2.5 billion, Microsoft sites at 1.6 billion, Ask Network at 545 million, and AOL at 383 million, according to comScore.

Piper Jaffray Senior Research Analyst Gene Munster remains positive on shares of Google, and believes the quarter continues to track in line with expectations. When Google reports earnings on Jan. 21, Munster expects to see an upward trend for third-party paid-click data. With two months of third-party paid-click data already in, Google's U.S. paid clicks continue to track up by 10% quarter-on-quarter, he wrote in a research note.

"We are modeling for both Google's U.S. paid clicks and CPCs to rise 4% sequentially in Q4," Munster wrote. "If U.S. paid clicks end up 10%, quarter on quarter, for Q4, we believe Google's net revenue and PF EPS would benefit by 2%. We believe the company could post $6.42 on $4.89 billion in revenue with paid clicks up 10% sequentially for Q4."

When it comes to social media, the sites did not fare too well, according to comScore. In December, both Facebook with 351 million searches and MySpace with 416 million searches lost share -- 1% and 5%, respectively -- from the previous month. The big winners for companies other than search engines were eBay -- which rose 7% to 680 million -- and Craigslist, which rose 3% to 583 million.

Colin Sebastian, digital media and Internet analyst at Lazard Capital Markets, expects eBay to report fourth-quarter results in line to slightly higher than revenue and EPS estimates of $2.3 billion and 0.39 cents. He believes it is driven by ongoing growth for PayPal, and to a lesser degree, stable marketplace trends. "We expect a return to positive GMV growth for the U.S. Marketplace (+2%, ex-Vehicles) and continued strength of fixed price listings," he wrote in a research note. "We also expect another round of Marketplace changes to be announced shortly."

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