First, MSN showed a drop in web search market share, down to 12.9% from 15.3% a year ago.
Now, as Saul Hansell reports, Yahoo is struggling. Some excerpts:
[Yahoo] reported weak revenue from Internet search advertising in the second quarter and a delay in a critical project that is meant to increase search revenue ... [as] it has been struggling to rebuild its search service.Why are these companies unable to compete against Google?
Google ... produces 40 percent more revenue from each search than Yahoo does ... thanks to software that is better at selecting relevant text advertisements to place on a page of search results.
Terry Semel, Yahoo's chief executive, told investors ... that Project Panama, the company's effort to match Google's ad-selection technology, would be delayed by at least three months ... The two-year-old project is already many months behind its original schedule.
[Analyst Safa] Rashtchy said he estimated that Yahoo's revenue from search advertising actually fell in the quarter .... There [also] were some signs that the growth of Yahoo's vast audience had stopped.
Update: A couple days later, Saul Hansell reports, "Google Profit Surges on Strong Search Advertising".
Update: And Pamela Parker notes that "revenues at Microsoft's MSN declined 3 percent year-over-year." [via Barry Schwartz]
Update: Tony Schneider (former VP at Yahoo) says, "Yahoo has lost its appetite for experimentation." [via Findory]