Yahoo! Making Like Google

Yahoo! (YHOO Quote) wants to be more like Google (GOOG Quote).

Yahoo! is considering redesigning its front page to make its search engine more prominent. Shares in both Internet leaders have been hit hard this year as investors have started reassessing the growth prospects and competitive landscape of the lucrative online search business.

The redesign would be the first major overhaul of Yahoo!'s front page since 2004. The discussions underscore the emphasis that the Sunnyvale, Calif., company is placing on search. comScore Networks estimates that Yahoo!, the No. 2 player in the U.S. search market, has 29% share, trailing only Google's 41%.

Yahoo!, which also is considering dangling prizes before users in hope of boosting the use of its search engine, is testing the changes to select users, according to Internetnews.com.

Investors are keenly interested in Yahoo!'s progress in search, especially since Chief Financial Officer Susan Decker told Bloomberg News in January that the company's goal wasn't to be No. 1. She said that Yahoo! would be "happy" to maintain its market share.

"It is an issue," says Martin Pyykkonen, an analyst with Hoefer & Arnett who rates Google a buy and Yahoo! a strong buy. "It's a 50-50 split among investors who think that Google will maintain its lead and those who think Yahoo! will close the gap."

In addition to Google, Yahoo! also is facing increased competition from smaller rivals in search, including Microsoft's (MSFT Quote) MSN and IAC/InterActiveCorp's (IACI Quote) Ask.com.

The changes at Yahoo! would put tabs for the My Yahoo! content reader and email on the left side of the screen and large icons for popular features such as email and weather on the right side, according to Internetnews.com. Tabs for news, sports and financial news would be in the center of the page, below the search box, which would be next to the company's logo.