Despite another big time success, Google can’t get too cocky

The rich continue to get richer when it comes to search.

Google (Nasdaq: GOOG) continues to fulfill roughly two thirds of the search queries in America, and Microsoft‘s (Nasdaq: MSFT) Bing continues to gain market share.

Fresh comScore research shows that Google served up 66.4% of last month’s U.S. queries. Bing is a distant second, at 15.9%, but they’re both in a better place than they were a year ago. The same can be said for and AOL (NYSE: AOL), but if everybody’s gaining ground, somebody has to be fading.

Oh, there you are Yahoo! (Nasdaq: YHOO). The original search star has seen its market share shrink from 16.3% to 12.8% over the past year.

Bing — including its Yahoo! searches — is now serving up 28.8% of the country’s explicit searches. That sounds impressive, but then one has to consider that Bing and Yahoo! combined for a 28.9% piece of the market a month earlier, and 30% a year earlier.

Aug. 2012 Aug. 2011
Google 66.4% 64.8%
Bing 15.9% 14.7%
Yahoo! 12.8% 16.3% 3.2% 3.0%
AOL 1.7% 1.3%
 Source: comScore.

It’s not pretty for Yahoo!, and this should also be problematic for Microsoft.

Mr. Softy agreed to pay up to power Yahoo!’s search business, but the outsourcing has destroyed Yahoo!’s credibility as a search portal. Why go to Yahoo! when you can just go straight through Bing?

The problem is that the combined market share of the two companies is slipping. Bing and Yahoo! accounted for 31% of the market a year ago, but it’s down to just 28.7% now.

Google also can’t rest easy. The year-over-year gain looks good, but Google’s share dipped sequentially from 66.8% in July. You have to go all the way back to March to find the last time that Google’s share of the search market was this low.

Investors will want to keep an eye on this trend, because investors can turn quickly when market share is declining. We’ve seen Baidu (Nasdaq: BIDU) in China take a US$9 billion market cap haircut over the past month, after slipping slightly in market share.

Google better not get complacent. Bing may be far away in the rearview mirror, but that doesn’t mean that investors will be okay if it decides to slow down.

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A version of this article, written by Rick Aristotle Munarriz, originally appeared on

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