Bloomberg News
Published July 12, 2007
Google Inc., owner of the world's most popular Internet search engine, will take 90 percent of the market over the next decade through increased spending on research and development, analysts at Cowen & Co. said in a note Wednesday.
Google's 2007 research-and-development budget of $1.5 billion is almost double that of its closest rival, Yahoo Inc., the analysts said. Google's capital investments, estimated at $26 billion over the next five years, will finance development of the company's own servers and data centers, the note said.
The Mountain View, Calif.-based company has been steadily taking market share from Yahoo. Google accounted for 67 percent of search engine queries in April, compared with 19 percent for Sunnyvale, Calif.-based Yahoo, according to ComScore Inc., a research firm.
"We believe Internet search is a natural monopoly, which is similar to the Yellow Pages business," Cowen analyst Jim Friedland said in the note. "If there were three directories in a region but one were easier to use and had more listings and features, would anyone use the other two?"
Shares of Google rose $1.13, to $544.47. Yahoo stock fell 28 cents, to $26.69. Both trade on the Nasdaq stock market.
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