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Yahoo! Inc. (YHOO)’s Buying Spree May Not Be Enough to Save the Day

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At one time, Yahoo! Inc. (NASDAQ:YHOO) was on top of the world. The company served as a web portal in the early days, as consumers were growing comfortable with the concept of using the internet. Then Google Inc (NASDAQ:GOOG) came along, and computer users realized they could go straight to the information they wanted, no portal necessary.

Still, Yahoo! Inc. (NASDAQ:YHOO) lingers, visited by sports fans and those who set up a customizable start page on the site years ago and who like the familiarity. The company’s search market share continues to drop as competitors like Microsoft Corporation (NASDAQ:MSFT)’s Bing see increased use. But the company continues to report disappointing numbers, dropping an average of 2% in year-over-year revenue each quarter for the past four quarters. Earlier this year Yahoo! Inc. (NASDAQ:YHOO) experienced its biggest drop in recent years, falling 6% from the same quarter in 2012.

Hope ahead?

Still, Yahoo! Inc. (NASDAQ:YHOO) isn’t going down without a fight. Since bringing CEO Marissa Mayer on board last year, the company has gone after a younger audience. Recent acquisitions are proof that Mayer wants to make Yahoo! Inc. (NASDAQ:YHOO)’s offerings more relevant than ever, with the company’s purchase of social blogging site Tumblr and e-mail organizational tool Xobni serving as proof of Mayer’s plans. But is it enough to convince Google Inc (NASDAQ:GOOG) and Bing fans to make the switch?

Bing’s increasing success is good news for Microsoft Corporation (NASDAQ:MSFT), which is currently losing ground in other areas. As the technology landscape continues to shift, Microsoft Corporation (NASDAQ:MSFT) is focusing more of its efforts on mobile and social media — two areas experiencing success. Bing recently climbed to 17% of the search engine market share, which is still small when compared to Google’s 66.5%. But Google Inc (NASDAQ:GOOG)’s search engine share dropped slightly while Bing’s grew.

This shift in thinking is paying off for the software company. In its last earnings report, Microsoft stated that profits were up 18.5% from last year at the same time to a total of $6.06 billion. Revenue was flat, but this was due to the cost of deploying a big upgrade to Windows 8. The company restated its intention to focus its efforts on the changing world of devices, with more of an emphasis on mobile. To continue to lure customers away from Google, look for Microsoft to find new ways to get those customers to check “Yes” when asked if they’d like to switch to Bing as a default search provider.

The search king

As Google loses ground to Bing, the company is beefing up in other areas. Ventures like Google Glass and the company’s own social media service, Google Plus, are helping increase confidence in the company’s stock. As the world is poised to hear the company’s latest earnings report, expectations are high. But Google has a history of strong performance that can’t seem to be shaken.

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