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Venture capitalist Paul Kedrosky is predicting Yahoo can outperform Google in 2007.

His reasons include:

• Yahoo needs to grow earnings faster than Google to regain investor interest
• It can do that by cutting costs, growing audience, acquisitions or improving monetization (or some combination of all four)
• It is easier to drive monetization than to increase audience markedly, and acquisitions are a mug's game without better monetization tools. Cutting costs is a non-starter.

I agree that Yahoo's likely hit the bottom and is ready to bounce back, but I'm not convinced they'll be able to gain enough momentum to outperform Google in the next twelve months. Looking beyond 2007, they could just do it, especially if the backbone of their new search marketing platform (Panama) is as robust as the front-end interface.

Speaking of Panama, how many have switched over to Panama? What do you think of it? Many Yahoo peeps read this blog, so leave a comment and you will be heard!

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Andy Beal is an internet marketing consultant and considered one of the world's most respected and interactive search engine marketing experts. Andy has worked with many Fortune 1000 companies such as Motorola, CitiFinancial, Lowes, Alaska Air, DeWALT, NBC and Experian.

You can read his internet marketing blog at Marketing Pilgrim and reach him at andy.beal@gmail.com.