Google February search share down globally

SAN FRANCISCO Wed Mar 19, 2008 7:25pm EDT

Google Chief Executive Eric Schmidt speaks during a news conference in Beijing March 17, 2008. REUTERS/Grace Liang

Google Chief Executive Eric Schmidt speaks during a news conference in Beijing March 17, 2008.

Credit: Reuters/Grace Liang

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SAN FRANCISCO (Reuters) - Google Inc's share of the global Web search market dipped in February from January, even as its U.S. share rose, Internet financial analysts said on Wednesday, citing market research data.

The data from comScore showed Google's dominance of the worldwide market for Web search dipping to 62.8 percent in February from 63.1 percent the month before, according to an analyst, who declined to be named.

Analysts view the monthly comScore search market data as an indicator on growth trends in Web search. Several recent monthly reports have sparked debate on Wall Street over whether the market is maturing, even though year-to-year growth rates remain high.

The volume of U.S. searches done through Google dropped to 5.86 billion from 6.14 billion in February, and the worldwide volume of searches also declined, comScore said on Wednesday.

"We are continuing to see deceleration in growth in Web search," said Jefferies & Co analyst Youssef Squali. "Google's month-over-month 5 percent decline is a little surprising, but all of the major Web search names were down."

The drop was partly due to February being two days shorter than January, a comScore spokesman said. However, several analysts said it may also reflect a maturing market. By contrast, searches rose 9 percent in January over December.

Amid a steep decline in the broader market, Google shares closed off $7.16, or 1.6 percent, to $432, while Yahoo Inc fell 59 cents, or 2.1 percent to $27.07. The Nasdaq Composite index slid 2.6 percent.

Investors cull comScore's monthly search data for clues to growth trends in Google's core business of online advertising tied to such Web searches, and to watch if any rivals slow the Google juggernaut. ComScore released summary data on U.S. search market trends, but worldwide data is only available to paid subscribers.

With search statistics becoming more unpredictable month to month, investors have begun to focus on how well Google is converting Web searches into ad viewership.

Data on growth in "paid clicks," or the number of Web search ads viewed in February, are expected to be released by comScore to clients later this week or early next week.

According to comScore data, Google's U.S. share among the top five Web search providers grew to 59.2 percent in February from 58.5 percent in January. Yahoo Inc's U.S. share dipped to 21.6 percent from 22.2 percent.

Microsoft Corp, rated No. 3 in U.S. Web search, slipped to a 9.6 percent share in February from 9.8 percent in January. No. 4 AOL, a unit of Time Warner Inc, and No. 5 Ask.com, a unit of IAC InterActiveCorp, held steady at 4.9 percent each.

Citigroup analyst Mark Mahaney, in a research note, blamed Google's decelerating growth in recent months on the maturing computer-based Web search market.

"Google's U.S. query growth of 26 percent marked a deceleration versus 37 percent growth in January and 40 percent growth in Q4," Mahaney said.

ComScore, which tracks online audiences in 20 major Internet markets around the world, estimated Web surfers performed 66 billion searches overall in December, 71.9 billion in January and 67.4 billion in February.

Google's 62.8 percent market share of the worldwide market compared with 58.5 percent in February 2007, according to a reading of comScore data by the unidentified analyst. Similarly, Yahoo's global share dropped to 11.9 percent from 12.2 percent in February from January.

Chinese Internet search leader Baidu.com Inc slipped to 4.5 percent in February globally from 4.6 percent in January, while Microsoft's share was steady at 3.1 percent, the analyst said, citing comScore data.

(Reporting by Eric Auchard; Editing by Gerald E. McCormick/Jeffrey Benkoe)

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