Web search leader Google Inc. gained an additional 6 percentage points of the U.S. search market based on total queries, widening its lead last month against Yahoo Inc. and Microsoft Corp.’s MSN, while a re-branded Ask.com is inching up, according to the latest statistics from ComScore Networks released recently.
Google’s domestic market share rose to 42.3 percent in February, up from 36.3 percent a year earlier, ComScore said.
Yahoo’s search market share in the United States fell to 27.6 percent from 31.1 percent a year ago, while Microsoft’s MSN fell to 13.5 percent from 16.3 percent and Time Warner’s America Online fell to 8 percent from 8.9 percent.
IAC/InterActiveCorp.’s Ask.com was the only other search engine to gain share, to 6 percent of the market from 5.3 percent a year earlier.
Analysts predicted continued gains for Google and Ask.
Industry analysts picked up on the data, citing it as a strong sign for Google in its rivalry for advertising revenue. An overall 11 percent increase in total search queries for the month also bodes well for the sector, they said.
We expect Google’s increased market share in search queries, and better monetization of queries to lead to increased share of ad dollars relative to its competitors in the first half of 2006, Merrill Lynch analysts Justin Post and Lauren Rich Fine wrote in a research note issued lately.
Merrill Lynch analyst Lauren Fine predicted that Google’s increased market share and better monetization of queries will lead to an increased share of ad dollars relative to competitors in the first half of this year.
Google could eventually capture a 70 percent market share, according to RBC Capital Markets analyst Jordan Rohan.
"The question really comes down to how long it could take," Rohan wrote in a research report. He rates both Google and Yahoo shares at "outperform."
At the same time, Rohan noted that market share data does not always correlate with the ability of companies like Google to generate revenue from Web searches. For example, Rohan noted that Google revenue rose 20 percent for the third quarter, even though the volumes of searches on its site were down during the period.
Furthermore, we believe the company’s clear strategic focus on search will continue to provide a competitive advantage for the company over the next several months as leading competitors struggle to overhaul/improve their search platforms, Fine wrote in a research note.
Meanwhile, Yahoo’s improvements to relevancy and search monetization "appear to have had minimal effect on market share trends," she said. In addition, it will take a few more months to determine if Microsoft’s new search technology, introduced just over a year ago, is "improving the consumer experience," she wrote.