For an Internet company, research is the creation of innovation -- the ability to plant seeds for growth several years down the road. And investors who don't know the nuances of search algorithms can still handicap a stock's long-term prospects by looking at the intellectual brainpower going into its research initiatives.

In the horse race between Google ( GOOG) and Yahoo! ( YHOO), the conventional wisdom is that Google has the edge in research: Its stock is up 240% since its IPO nearly a year ago, vs. a 26% appreciation in Yahoo!. Google is very finicky about its hires, which means if you get in, your job becomes a kind of daily Mensa party. And then there's the freedom -- if not the expectation -- to spend 20% of your time on a labor of love.

But it's far too early to write off Yahoo!, which has been steadily, if quietly, building a stable of brilliant researchers on its own. Under the leadership of Usama Fayad, Yahoo!'s chief data officer, the company has brought in its share of intellectual caliber, most recently in the hiring of Prabhakar Raghavan, head of Yahoo! Research, as well as a research partnership announced with the University of California, Berkeley.

So, with all of the Google hype, why would any brainiac go work for Yahoo!? Raghavan and others at Yahoo! offer two compelling reasons: First, Yahoo! has the Rosetta Stone of online customer data. For 10 years, it's collected the daily search, email, financial and entertainment habits of users, which number in the hundreds of millions today. And second, by extension, that data open up a lot of areas of research beyond search -- including fast-developing areas such as social networking, user interface and data mining.

"There's no bigger collection of data on this planet. We're collecting 10 terabytes of data a day, and that doesn't include Web pages and 'html' content, which may be the primary focus of someone at Google," says Raghavan, a research veteran from Verity and IBM. Raghavan is also a Stanford consulting professor and the editor-in-chief of the Journal of the Association for Computing Machinery.

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