Yahoo! searching for answers

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Shares of Yahoo! Inc., in rally mode for most of the year, lost ground Wednesday, a dip that coincided with the release of data indicating that its market share for Internet searches further slipped last month.

According to ComScore Networks, Yahoo!'s share dipped 0.4% to 28.1% in the U.S., down from 28.5% in December. The drop was the largest among the nation's top search engines, though Yahoo! easily retains its second-place status behind Google Inc.

Also losing market share was Ask Network, a unit of Barry Diller's IAC/InterActiveCorp. Ask dipped 0.2% to a 5.2% share last month.

Gainers were Time Warner Inc., which rose 0.1% to 5%, Microsoft Corp., up 0.1% to 10.6%, and Google, up 0.2% to 47.5%.

Yahoo! was down as much as 2.5% on Wednesday, but after a late-day recovery, shares of Yahoo! fell just 1.1% to $31.65. Shares are up 24% so far this year, mostly because investors are excited about the rollout of Yahoo!'s new ad platform dubbed Project Panama that should to help the company better monetize its search traffic.

Google rose 0.8% on Wednesday to $475.86 but is off 1.8% so far this year. Time Warner slipped fractionally Wednesday, Microsoft rose 1.8% and IAC/InterActiveCorp. was up fractionally.

Americans conducted 6.9 billion online searches last month, up 2% compared with December and up 26% compared with January 2006, ComScore found.

Time Warner accounted for 342 million of those searches, while Ask was at 361 million, Microsoft was at 733 million, Yahoo! was at 1.9 billion and Google was at 3.3 billion.

But Google's dominance isn't as impressive as it once was, according to some on Wall Street. Bear Stearns analyst Robert Peck said that Google's number of search queries grew 44% January-over-January, down from the 50% growth rate the company scored for the December-over-December period.

Some Street observers also speculated that investors might have been spooked -- albeit temporarily -- by reports of Google's YouTube unit suffering a setback in its relationship with CBS Corp. In early trading Wednesday, Google shares were down 1% before a mid-day recovery took the stock into positive territory.
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