Dissecting Pro Picks in the Search Market

In the search business, Google (GOOG) is a force to be reckoned with, but some notable Pros opted for the runner-up in Q4.

In the U.S. search market, Google owned a 65.4% of the market in January, according to research firm comScore. That’s almost four times next-best Yahoo (YHOO). Pro investors, meanwhile, prefer Google at an even larger ratio, nearly 10 to 1.

Google’s Android smartphone software more than doubled its market share during Q4, according to comScore. Unlike Apple’s (AAPL) iPhone, Android phones are compatible with Verizon (VZ) and Sprint (S) networks. AT&T (T), which has exclusive rights to the iPhone as well as the much anticipated iPad tablet, will release its first Android offering in March, according to USA Today.

As of the most recent regulatory filings, 425 Pros counted Google among their top-15 U.S.-listed equity holdings. Meanwhile, Yahoo trailed with 48 Pros based on the same criteria.

While Google ran away with the numbers, a closer look at Yahoo’s holders shows that a number of closely watched hedge funds are among them. Carl Icahn, an activist hedge fund manager who recently resigned from Yahoo’s board, was trimming stakes in the search engine during Q4. A look at Icahn’s top holdings from the end of 2009 shows Yahoo was the only large position where he took some money off the table.

According to MarketWatch, George Soros more than quadrupled his Yahoo stake. However, it still wasn’t enough to put the position among his hedge fund’s top-15 end-of-2009 bets. Instead the portfolio remained notably energy-oriented with large stakes in Hess (HES), PetroBras (NYSE: PBR, PBR.A), and Suncor (SU), among others.

Ken Griffin’s Citadel fund and Charles Coleman’s Tiger Global Management also counted Yahoo among their top positions at the start of 2010.

To see who else was investing in Google and Yahoo, or to find out what other stocks these funds were invested in, visit tickerspy.com, where members can track their favorite Pros and see a chart of their top holdings’ combined performance.

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Pro portfolio performance is based on institutions’ top-15 holdings as disclosed in quarter-end filings with the SEC. Pro performance does not take into account additional holdings beyond the top 15 nor does it include positions that are not required to be disclosed by the SEC. As such, Pro portfolio performance should be considered an approximation and not a precise record of how an institution has performed over time.

Tags: AAPL, GOOG, HES, PBR, PBR-A, S, SU, T, VZ, YHOO