Google Inc. is extending its lead in the Internet search market in the United States at the expense of Yahoo! Inc. and Microsoft Corp.’s MSN unit, a market researcher said.
Google’s share of U.S. search queries rose to 42 percent in February from 36 percent a year earlier, researcher ComScore Networks Inc. said. Yahoo’s share dropped to 28 percent from 31 percent, while MSN’s share fell to 14 percent from 16 percent.
The gains by Mountain View, Calif.-based Google indicate first-quarter sales may be higher than expected, Piper Jaffray & Co. analyst Safa Rashtchy wrote in a note to clients Tuesday. Google has increased its share of U.S. Internet search queries for seven straight months, said Rashtchy, who rates the shares “outperform.”
“We see little to stop Google from reaching 70 percent market share eventually,” RBC Capital Markets analyst Jordan Rohan wrote Tuesday in a note. “The question really comes down to how long could it take.”
Internet search engines make money by displaying small promotional links next to results. Advertisers pay Google, Sunnyvale, Calif.-based Yahoo and Redmond, Wash.- based Microsoft a fee when Web surfers click on the spots.
Google shares Tuesday rose $7.51 to close at $377.20 on the Nasdaq. They have fallen 9 percent this year. Yahoo shares, down 17 percent this year, rose 94 cents to $32.39. Microsoft fell 11 cents to $26.90 and has risen 2.9 percent this year.
Google’s gains come even as Yahoo and Microsoft make investments to capture a larger share of U.S. Internet search, a market Merrill Lynch & Co. estimates will grow 32 percent to $6.91 billion this year.
