Yahoo! ( YHOO) will get yet another chance Tuesday to bust out of Google's ( GOOG) shadow.
Shares of Yahoo!, the most visited Web site, are off 18% this year amid bruising competition. Yahoo! has become one of tech's most visible laggards, even as the Nasdaq Composite Index is down 7.6% and Google is off 1%. Now, backers of Yahoo! are once again hoping that an earnings report will break the stock out of its long slump. Some observers believed in the run-up to April's first-quarter earnings report that the bar was low enough that Yahoo! could easily exceed it. But a subsequent rally was short-lived. Wall Street has argued for months that Yahoo!'s doldrums are unjustified, but to no avail. Five have raised their ratings on the shares of the Sunnyvale, Calif.-based company since January. Their mean target price is $41.73. Several bulls say they expect the company to beat earnings forecasts. "Large-brand advertisers have indicated substantial increases in online advertising budgets in 2006, with continued high ad spending in sectors such as automobiles, personal electronics and financial services," writes Piper Jaffray analyst Safa Rashtchy, who rates both Yahoo! and Google outperform, in a recent note to clients. "Much of this increase will be in search where Yahoo! remains a solid No. 2 player, these large-branded advertisers will likely continue to increase their spending in branded online advertisements where Yahoo! is the undisputed leader." This time around, analysts are forecasting that the company made 11 cents a share for the second quarter ended last month, down from 13 cents a year ago. Sales likely rose 30% from a year ago to $1.14 billion, according to Thomson Financial. Google's continued gains in the search market continue to concern Yahoo! investors. The latest data from comScore shows Google with 44% market share, Yahoo! with 28% share and Microsoft's ( MSFT) MSN with 13%. comScore shows Google gaining share for the 10th straight month in June, on a year-over-year basis, at the expense of Yahoo! and other rivals. To view Street Insight's video preview of Yahoo!, please click here .