SAN FRANCISCO – Google’s lightning-quick acquisition of online video pioneer YouTube once again demonstrated the Internet search leader’s penchant for pouncing on golden opportunities that leave its rivals scrambling to catch up.
Perhaps no Google competitor has fallen behind in recent months as much as Yahoo Inc. – an Internet icon battling perceptions that it has lost its competitive edge, even as it continues to attract the largest audience on the Web.
Google’s $1.65 billion deal to buy YouTube, announced Monday, is just the latest flexion of the Mountain View-based company’s muscle.
During the summer, Google formed an advertising alliance with News Corp.’s MySpace.com, a social-networking site that is challenging Yahoo as the Internet’s most viewed site. Just as important, Google has continued to widen its lead in the lucrative search market – the main reason investors think the company is worth $130 billion after just eight years in business.
Meanwhile, Yahoo delayed a highly anticipated improvement to its advertising network and missed analysts’ third-quarter revenue targets. Those disappointments have contributed to a 38 percent decline in Yahoo’s stock price so far this year, wiping out $22 billion in shareholder wealth.