i have often heard people state that 1% of search market share is worth 1 billion dollars. when i hear that statement it is generally accepted as fact. but with the recent stock swings i decided to take a closer look.

currently yahoo has a market cap of about $17 billion and their recent market share is around 20%. ok that is close to a billion per 1%.

then i look at google's market cap and it is around $105 billion. it may seem like google handles 100% of search but they are only estimated to be around 63% of search market share. it is very interesting to see that the stock market feels google's market share is twice as valuable as yahoo.

does this mean yahoo is undervalued, google is overvalued or some other factor like google has better business efficiency with a majority of market share?

*please pardon if the numbers may be a little off. market cap can fluctuate alot since the stock market is a bit crazy right now. as for the search market share it varies depending on which market research firm you ask but they are all near each other.