The Motley Fool, in typical Foolish ways, makes a bold sounding statement that Google is the worst stock for 2007, based upon the premise that increased competition from Yahoo and Microsoft, combined with a fickle online ad market, will eat into Google’s growth.  These arguments really don’t have any merit. At the moment, Yahoo and Microsoft do not offer much competition to eating into Google’s advertising profits. Here is why
1. Microsoft AdCenter Sucks -  I’m sorry, but it does. I work at a place that has a multi-million spend with the search engines and we received a lot more traffic from MSN when it was bundled with Overture. While there are many nifty graphs, there is hardly any traffic except for the major terms and loading campaigns with keywords is cumbersome at best. I don’t need a fancy interface, I need a clean and easy to use interface that lets me get going fast and receive quality customers. Oh wait, that is Google Adwords.

2.Yahoo’s Partner Network is Corrupt - Love Yahoo.com visitors. Great people, great traffic. Insurance2342.com, I-am-a-fake-domain.com — don’t like that so much. As reported in the Business Week article on click fraud, Yahoo has some serious problems with their partner network. They have artificially inflated their traffic numbers by adding bunk sites to the mix and as a result their click prices have declined and more advertisers have lost faith in their network. With Google, I’ve only seen prices go up and the traffic quality increase overall.

3. Online Advertising Dollars are Accelerating - More and more businesses are going online to find customers and search marketing is one of the best ways to do it. TV is being eaten by GooTube, as is print and other forms of media. Google is laying the foundations to be the ultimate broker of online advertising which is the only form of advertising that is still growing steadily. Tools like Google Adwords editor, buying YouTube, Demarc, and other forms of automated media creation and deployment make me think Google has something up their sleeve. Neither Yahoo nor Microsoft are showing similar sophistication or vision.

Maybe in 5 years Yahoo and Microsoft might get their act together but as it stands right now they are seriously losing out in the fight for advertising dollars and search engine share, not even counting brain drain of excellent engineers and product managers moving to the “Don’t Be Evil” camp. So for this particular one Motley Fool, I think you are being a bit Fooooooolish.