CEO Belittles Google's Expansion

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CEO Belittles Google's Expansion

By MICHAEL LIEDTKE, AP Business Writer1 hour, 7 minutes ago

 

 

 

Inc. (Nasdaq:YHOO - news) Chairman Terry Semel belittled rival Google

Inc.'s recent efforts to expand beyond its leading Internet search engine,

describing the diversification as a haphazard attempt to catch up with his

company.

 

" So far they don't seem to have a plan, but maybe they do, " Semel said Thursday

during a question-and-answer session at an Internet conference. " Maybe magic

will happen tomorrow. "

 

Earlier in the conversation, Semel praised Google's online search prowess,

hailing the company as a pioneer in that field.

 

But then he noted that Google seems to be following in 's footsteps by

adding an array of new products like e-mail, photo sharing, social networking,

personalized home pages and voice communications.

 

The additional features, Semel said, have made Google " look more and more like a

portal. And as a portal, it probably would be rated No. 4. "

 

Semel didn't specify which portals he considered to be superior, but he most

likely was referring to , Microsoft Corp.'s MSN and Time Warner Inc.'s AOL.

All three of those sites are built around a mixture of e-mail, news,

entertainment and e-commerce that consistently ranks them among the most popular

destinations on the Web.

 

Asked to respond to Semel's remarks, Google spokeswoman Lynn Fox said: " We

appreciate recognition of Google's leadership in search. It's a highly

competitive industry, and that ultimately benefits users. "

 

Although 's competition with Google has been heating up during the past two

years, Semel generally has avoided public comments about his rival.

 

Semel's restraint contrasts with the more confrontational approach of

Microsoft's top executives. Both Chairman Bill Gates and CEO Steve Ballmer have

depicted Google as the equivalent of a one-trick pony likely to face a rough

road.

 

Google so far has continued its online search engine dominance while rolling out

new products that loom as possible threats to both and Microsoft.

 

Through August, Google controlled 37.3 percent of the U.S. search market, up

from 36.1 percent at the same time last year, according to comScore Media

Metrix. Meanwhile, 's share dipped to 29.7 percent from 30.6 percent a year

ago.

 

With so much advertising now tied to online search requests, Google has

capitalized on its market-leading position to outpace 's recent earnings

growth.

 

Investors apparently like Google's strategy.

 

Google's stock has increased by more than 60 percent so far this year,

propelling its market value to $91 billion. 's stock, in contrast, has

dropped by 10 percent so far this year, leaving its market value at $48 billion.

 

Google's shares rose $2.04 to close at $312.75 on the Nasdaq Stock Market, where

's shares gained 31 cents to finish at $33.80.

 

Semel told Thursday's audience that he believes ultimately will be

rewarded for its more diversified approach to the Internet. " This is a marathon

run, not a sprint, " he said.

 

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