Google rules

With its three-month pursuit of Yahoo at an end, Microsoft is back where it started: far behind Google, the undisputed online-advertising leader. For years, Microsoft has been striving for a bigger share of the billions of advertising dollars migrating online. Buying Yahoo would have gone a long way to make that happen, the company reasoned. Now, after the companies could not agree on a purchase price, Microsoft has to chart a different course. Chief executive Steve Ballmer, in an e-mail to employees said Although the acquisition of Yahoo would have accelerated our ability to deliver on our strategy in advertising and online services, I remain confident that we can achieve our goals without Yahoo. But some analysts were not convinced. They need to say something thats credible, says Charlie Bona of the New York-based investment research firm Sanford C Bernstein. Others see Googles lead in Internet-search advertising as insurmountable, despite the billions of dollars and years of effort Microsoft has poured into its own search engine.