Yahoo! (YHOO) And Microsoft (MSFT) Nightmare: Google’s Tech Gets Better

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Search engines users may not think about it, but Google (GOOG) is improving its core search product all of the time. According to a piece in The New York Times, the company has legions of engineers who do nothing but fine tune and improve the Google search functions. As the newspaper writes, quoting one expert: “Their secret sauce is how these guys are doing it all in aggregate. There are 1,000 little tunings they do.”

Google has an almost 50% share of the search business in the US, and, by some measures, more worldwide. While Yahoo! (YHOO) and Microsoft (MSFT) clearly have large numbers of engineers working on their products, they have a double disadvantage. First, the typical internet user thinks Google’s results continue to work better than any competitor’s. And, second, Google’s share of market is already close to double Yahoo!’s.

With Google’s recent purchases of FeedBurner and DoubleClick, it is building a tremendous lead in delivering targets online advertising across a number of venues. It intelligent work putting together these assets is only compounded by superiority in it central business.

Google is in one of the few industries where the competition has literally run out of good strategic alternatives.

Douglas A. McIntyre can be reached at douglasamcintyre@247wallst.com. He does not own securities in companies that he writes about.