Yahoo Declines in Market Share Over Google Ad Partnership

Yahoo Inc not only lost to Google on search engine market share, but also lost on advertising. Financial experts still do not understand why the company didn't sell to Microsoft. Company stock dropped 5 percent on Friday.

Yahoo Inc and Google Inc will soon launch their advertising partnership. The deal will not go without scrutiny or industry protests. Regulators are watching both companies as protesters are calling it a monopoly in search engine advertising.

According to recent stock prices, Yahoo is losing shares. When the deal between Google and Yahoo was first announced, Yahoo's stock was in the upper $20s. However, when Microsoft was interested in buying Yahoo, stock for the search engine company rose to $31. Microsoft offered $33 a share. When Microsoft walked away, the stock for Yahoo dropped below $20.

Some financial analysts believe that Yahoo CEO Jerry Yang is killing the company over a personal dispute with Microsoft. After all, Yahoo could've earned billions in the acquisition. Yang said the offer was below company value.

If company stocks don't show the decline in company value, the search market share does. Yahoo lost almost 2 full points of search share since January. Yahoo now holds 20 percent of the overall search market.

Google has captured Yahoo's investors and continues to take its search engine market bit by bit. In other words, Google is winning the search engine war while taking more users away from Yahoo. They also won the advertising war since Yahoo ads have under performed.

While the stock market rose 400 points on Friday, Yahoo stock declined 5 percent. It is quite clear that investors are losing faith in Yahoo and are watching its search engine business decline.

Microsoft lost the bid to acquire Yahoo, but in some ways they won.