Biggest Search Engine Winner in 2008: Yahoo!

I've long recognized Google as the fastest growing company in the history of capitalism.  I owned the stock from the day it came public until I sold everything to focus on TV.  And Google's certainly blown away every other company on the planet when it comes to building value on the Internet.

Indeed for a very long time I used to stay long Google and while shorting Yahoo:

Battle of the Search Giants By Cody Willard RealMoney.com Contributor 4/12/2007 12:43 PM EDT Click here for more stories by Cody Willard

In yesterday's episode of "Cody & Task," I talked about the idea of staying long and/or building my Google position while shorting Yahoo!. The big problem with shorting Yahoo! is that it's positioned to benefit greatly from the secular growth of advertising on the Internet. About 5% of all advertising is now done on the Net, but the medium should pick up another 45 percentage points over the next decade or so.

But while we should recognize the market values Google worth more than three Yahoo's, I have to say that we might outta Flip all this endless Jerry Yang bashing and consider that Yahoo's valuation relative to where it was at the beginning of this year.

After all, Google's been crushed since late last year when it became a supposedly a "safe" stock and I turned bearish on it.   Indeed indeed indeed -- take a look at Yahoo's relative performance to Google's and Microsoft's stocks this year:

Poor Jerry Yang -- the guy's completely on the wrong side of opinion of the media and the analysts and his employees.  Well, then again, the guy says he's betting the future of his firm on his biggest competitor's technology...that's not going to work out well for him or his shareholders.  Even if it actually has worked out better for him and his shareholders than Google's and Microsoft's stock has been for its heads and investors this year.

What to do now?  I got bullish on Google again when it dipped below $500 and I continue to think anytime Google's below $500 it's both a good trade and investment.  And Yahoo...for 2008, I think it's got $3 or so down side and $10 or so upside and the upside's probably a pretty good bet.  Maybe some longer term, out of the money calls.   I also got bullish on Microsoft again when it dipped below $28.   I still like it here.