Google Inc. (NASDAQ: GOOG) and Yahoo Inc. (NASDAQ: YHOO) are two of the 20 innovators of The Innovation Index.
“Google's sites had 528 million visitors worldwide in March 2007, a 13 percent gain from the same month a year ago, according to ComScore Inc.. Microsoft had 527 million, while Yahoo had 476.3 million, the researcher said.
The popularity of searching the Web and new sites such as YouTube helped Google grow faster than both its biggest rivals. Products such as the Gmail e-mail service, an online calendar and an online payments system are drawing users even though they aren't nearly as popular as Google's search engine.”
Google already is the most-popular Internet search engine, drawing 48 percent of U.S. queries in March 2007, according to ComScore. Sunnyvale, California-based Yahoo was the most-visited U.S. Web site in February and also had the most repeat visits of any Web site.
In March 2007 I wrote a report on Can Yahoo Catch Google? after Yahoo had recently launched Project Panama, Yahoo's answer to Google AdWords and the making of a better search mechanism.
In the last two weeks both Yahoo and Google announced their earnings for the latest quarter. Project Panama had not yet impacted Yahoo's topline revenue; however, Yahoo officials are hopeful that Panama will have some impact in 2007. The question from the investors and analysts looms is how much impact Project Panama will have when the dust settles.
When one examines the growing gap between Yahoo and Google in terms of quarterly revenue, quarter over quarter revenue growth, quarterly net income, quarterly net profit margin, yearly innovations and stock performance gains, the picture becomes increasingly clear. Google is unstoppable at this juncture! And as of recent quarter's earnings announcement, Google has achieved another historical milestone vis-a-vis Yahoo, a first in its storied existence -- The Quarterly Revenue Gap between Google and Yahoo doubled -- Or to put in simpler terms: Google's quarterly revenues are now more than double Yahoo's quarterly revenue. 2007 will mark the first year when Google's revenue and profits will more than double Yahoo's. It's not just revenues. Google has widened the gap in Quarter over Quarter Revenue Growth, Net Income, Net Profit Margin and Stock Performance. Only the volume of Innovations or Gross Innovations is an area where Google and Yahoo seem to have some parity. Which brings me to the central point: Are sheer number of Innovations (total innovations) a leading indicator on how well a company is growing, or poised to grow? Alternatively, one has to really examine under the hood and look at not only the actual number and type of new products introduced, new collaborations and acquisitions, but also current market leadership and execution to understand how well the company is growing.
