Search for Google IPO Is Over

A key difference between Google and Overture, before it was acquired by Yahoo!, was that Overture supplied only its search-engine results to other companies; it wasn't a destination site for Internet users to start searching. Google, in contrast, had the fourth-largest audience among U.S. Internet users in March, according to Nielsen//NetRatings, behind only Microsoft (MSFT), Time Warner and Yahoo!.

Though fewer people do Internet searches via Google than via Yahoo!, more searches are conducted on Google, according to comScore Networks.

Of the approximately 3.5 billion Internet searches that U.S. Internet users conducted in February, 35% took place on Google, compared with 30% at Yahoo!, according to comScore. (Tied for third place, at 15% apiece, were Microsoft and Time Warner.)

In February 2003 -- the last month, according to comScore, that Yahoo! had a greater share of U.S. searches than Google -- Google had 27% of the nearly 3.4 billion searches conducted, while Yahoo! had 31%.

Search-engine advertising -- which was the Internet's success story even as the Internet ad market deflated following the dot-com bubble -- is expected to continue its healthy growth, though forecasts vary.

In March 2003, Piper Jaffray predicted the worldwide search market would go from $1.4 billion in 2002 to $7 billion in 2007.

In November, Pacific Crest Securities forecast that worldwide search-engine advertising would grow 40% annually, from $2.1 billion in 2003 to $7.8 billion in 2007.

Overture told analysts a year ago that annual sales of Internet-search and related services, including contextual advertising, could grow to as much as $15 billion worldwide by 2008.

However fast search-engine advertising is growing, it's growing faster than people have expected. In the first quarter ended March 31, Yahoo! shocked analysts with its revenue growth; on an organic basis, advertising revenue grew 48% year over year in the first quarter, thanks to both search advertising and traditional, branded online advertising.

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