As the search engine wars heat up between Yahoo and Google it's very interesting to note the similarities and differences between the two. Both companies are based in Silicon Valley with only 5 miles separating the two of them. Google has approximately 3,021 employees whereas Yahoo employs 7,600.
Google was created in January 1996 whereas Yahoo is exactly two years older however Yahoo went public (IPO) on April 12, 1996 - Google's IPO wasn't until August 19,2004.
Founders
Yahoo was founded in January 1994 by David Filo and Jerry Yang who were both Ph.D. candidates at Stanford University. Google was founded exactly two years later on the same campus by another pair of Stanford Ph.D candidates named Larry Page and Sergey Brinn. All four were in their early to mid twenties when they founded their respective companies. Today all four are internet legends and multi-billionaires.
What Do Their Names Mean?
Yahoo is an acronym for Yet Another Hierarchical Officious Oracle
Google comes from the mathematical term "Googol" which is 1 followed by 100 zeros.
S&P 500
Yahoo was added to the S&P 500 on December 8, 1999. Google is currently not an S&P 500 company. To be added to the S&P 500 a company must have a market cap of at least $4 billion, be liquid and have a 50% float - all criteria that Google currently has. In most cases the S&P 500 likes to have four public quarters of earnings before a company is added. Google is a behemoth and will soon be added to the index. Once added fund managers (who cover the S&P 500) will be required to buy shares of Google which could potentially result in a stock increase.
Yahoo's 5 Stock Splits
Yahoo has had 5 stock splits going public. Its first stock split came almost 17 months after its initial public offering (IPO.) Google has yet to split its stock even though it's approaching $300 but Google has only been public 11 months. Google will be a public company for 17 months around the end of 2005.
Revenues
According to financial results approximately 50% of Google revenues come from ads (Adwords) on Google's US websites, approximately 33% comes from ads (Adwords) on Google's international websites and 15% come from network partner revenues who carry Google Ads (Adsense) on their websites. In sum approximately 98% of revenues come from Google ads either on Google or a partner site and either in the US or international.
Google AdWords (adwords.google.com) allows website owners the opportunity to place sponsored ads and links on the right hand column of their search pages. According to Google and Media Metrix the Google Network via AdWords reaches 80% of all internet users.
Yahoo's revenues also weigh heavily on similar ads and sponsored links on its network implemented by Yahoo Search Marketing, formerly Overture which it acquired in October 2003 for $1.63 billion. Approximately 87% of Yahoo's revenues come from market service revenues. Approximately 12% are from fees.
Search Engine Traffic
Yahoo leads the world in overall internet traffic. This is due in large part to Yahoo mail which draws approximately 40% of its 345 million monthly visitors.
However where Yahoo is the king of traffic Google is the king of search referrals. According to WebSideStory (www.websidestory.com) Google's share of all US searches hit 52% in June 2005 up from 45% in June 2004, 38% in June 2003, 32% in June 2002 and just 12% in June 2001.
As Google's share of referral searches increases over time those of Yahoo have decreased. Yahoo's share of US searches was just half that of Google's at just 25% for June 2005, 27% for June 2004, 32% for June 2003, 33% for June 2002 and 37.5% for June 2001.
MSN, the second most visited website thanks in large part to Hotmail, falls far off the charts when it comes to individuals using their search engine. Of all the searches performed in the United States just 10% used MSN in June 2005, 16% in June 2004, 17% in June 2003, 14% in June 2002, and 17% in June 2001.
According to Alexa.com Hotmail accounts for 68% of MSN's traffic, MSN Search just 7%, MSN.com 5%, MSNBC 2% and most of the others receive 2% or less.
The numbers are even more impressive for Google when going global. According to WebSideStory Google refers 73% of all search engine traffic in the UK, 42% in Japan, 81% in Australia and 91% in Germany.
In response to the amount of traffic that Yahoo Mail and Hotmail draw to their networks Google launched its own free email service in March 2004 called Gmail. Gmail currently attracts 5% of Google's overall visitors compared to the 80% that search draws. I would imagine that overtime this 5% will most likely increase and could potentially bump up Google ahead of MSN and maybe someday to the number one slot pushing out Yahoo! Either way the top 3 search engines will be constantly keeping tabs on the other with Yahoo and MSN having the most to lose and Google the most to gain.
Acquisitions - Yahoo
Since its creation Yahoo has acquired approximately 28 companies compared to Google's 5. All of Google's acquisitions have been of private firms whereas Yahoo has purchased both public and private companies. During the internet boom Yahoo made one of the biggest dot.com purchases ever with the $5.7 billion acquisition of Broadcast.com in July 1999. Broadcast.com was an online audio service created by Mark Cuban to stream live audio coverage of his favorite sporting events. Yahoo's purchase of Broadcast.com made Cuban an internet legend, a billionaire and a future owner of the NBA's Dallas Mavericks. At the time of the purchase Broadcast.com was a publicly traded company (BCST) who saw its stock rise over $7 to $125 after the announcement.
Yahoo's first acquisition was for Net Controls in September 1997 for $1.4 million. Yahoo acquired ViaWeb, a developer of web commerce tools, for $49 million in stock in June 1998. In October 1998 Yahoo began its quest for free email service with the purchase of Four11 (Four11 offered a free email service via a product called RocketMail) for $92 million in stock. Today Yahoo's free email service accounts for 40% of its overall traffic - the largest driver of traffic to the Yahoo network. Yahoo announced its acquisition of Geocities in January 1999 for $3.6 billion.
Yahoo jumped into the marketing world with the purchase of Yoyodyne in October 1998 for $29.6 million in stock. Yoyodyne allowed Yahoo to collect user data and act as an intermediary between its users and commerce clients. Yahoo purchased its popular Launch music site with its acquisition of Launch Media in June 2001 for $12 million. In December 2001 Yahoo purchased the online job search company HotJobs for approximately $436 million. Inktomi was purchased in December 2002 for $235 million followed by Overture in July 2003 for $1.63 billion. In April 2004 Yahoo purchased Kelkoo, a European comparison shopping site, for $579 million.
Acquisitions - Google
In January 2003 Google announced its purchase of Pyra Labs (Blogger), a weblog publishing tool which is currently the 32nd most visited site in the world (according to Alexa.com.) In June 2004 Google announced its purchase of Picasa, a photo management company based in Pasadena.
In June 2005 Google launched its amazing world satellite imaging tool called Google Earth. This technology was a direct result of its purchase of Keyhole in October 2004 which gained popularity with its satellite imagery during the commencement of the Gulf War in March 2003.
So far all of Google's purchase acquisitions have been of private companies and therefore they are not required to disclose the financials of the purchase.