Google, Yahoo, Microsoft competition heats up at Christmas

Maybe it’s a symptom of Christmas shopping fever, but the struggle between Google, Yahoo and Microsoft for Internet Advertising dollars seems to be hitting a new high.

Google, the top dog in the online advertising kennel, taking part of the growing trend for online shopping by offering a number of deals tied up with its Checkout purchasing system.

For each $1 spent by American consumers, it is offering two frequent flyer miles on seven major airlines, and is also offering discounts of between $5 and $50 at many different merchants, the New York Times reports.

eBay, whose PayPal system is Checkout’s chief rival, also has top deals with brands like Toys ‘R’ Us and Hewlett Packard.

Google’s deals are sure to drive sales and bring its share price closer to the $900 predicted by Credit Suisse.

Meanwhile Yahoo is looking to capitalise on internet retail, although its hosted shopping services suffered outages on Monday (November 26th), traditionally one of the busiest shopping days of the year.

The problems were down to heavy holiday traffic, with perhaps even the leading internet companies underestimating how many consumers would flock to the web to make their Christmas purchases.

This is symbolic of the massive audience for internet advertisers.

Meanwhile, commentators are predicting that Microsoft may buy Yahoo, or that Yahoo may buy AOL, in order to compete more effectively with the behemoth that is Google.

“Google has locked up the number one spot in the sector, and the market won’t support more than three competitors,” said Henry Blodget writing in the Silicon Alley Insider.

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