Yahoo! Inc. (YHOO) vs Google Inc (GOOG): Who’d You Buy?

Can Marissa Mayer save Yahoo! stock?
What Yahoo! Inc. (NASDAQ:YHOO) stock has going for it over Google Inc (NASDAQ:GOOG) is a low baseline and the potential for magic from Marissa Mayer. She was one of Google Inc (NASDAQ:GOOG)’s first employees and knows how to build an Internet business.

If Mayer is successful, Yahoo! stock has plenty of potential. Both Yahoo! and Google trade at 17 times forward earnings, so with a little growth the stock could continue to charge higher. The big difference is we know Google Inc (NASDAQ:GOOG) is a steady growth company and Yahoo! has had problems monetizing traffic to its sites. I’ve made an outperform CAPScall on Google because of its consistency and innovation, but Yahoo! doesn’t have the same qualities… yet.

Foolish bottom line
I don’t like Yahoo! Inc. (NASDAQ:YHOO)’s trends in search or display ads but what it does have is millions of eyeballs visiting its sites every day. If Mayer is able to somehow able to make Yahoo! cool again, there’s a lot of upside, keeps me for making an underperform call on the stock. The problem is, I don’t see a lot of improvement operationally, which will keep me from making an outperform call as well. Like Yahoo!’s operations, its stock is stuck in no-man’s land.

To be honest, the best outcome for Yahoo! stock may be an acquisition by Microsoft Corporation (NASDAQ:MSFT), which looked likely just a few years ago. Without that, Yahoo! is stuck in neutral with a ton of traffic but no identity as a search, news, or tech company.

The article Is Yahoo! Stock a Better Bet Than Google? originally appeared on Fool.com and is written by Travis Hoium.

Fool contributor Travis Hoium manages an account that owns shares of Microsoft. The Motley Fool recommends Google. The Motley Fool owns shares of Google and Microsoft.

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