HEXUS.sharewatch: Microsoft gains, Yahoo! falls

Microsoft's new search/decision engine Bing continues to attract positive vibes. It managed to significantly improve Microsoft's share of the search market in the first week of its launch and initial reviews seem reasonably positive.

Furthermore, CEO Steve Ballmer has announced he's prepared to chuck billions of dollars at Bing in the next few years, in order to give Google a serious run for its money in the search market.

Those billions were previously earmarked for the acquisition of Yahoo! a year ago, but the Yahoo! board put up such a fight to prevent this happening that Ballmer decided it was too much hassle. In retrospect, the Yahoo! board did Ballmer a favour, as Yahoo! stock is still valued at under half the price he was willing to pay for it.

There has still been talk of some kind of collaboration or even the acquisition of parts of Yahoo! by Microsoft, but it could be that Bing's initial success scuppered that plan for good. This may have contributed to the divergent fortunes of the two stocks last week.

Meanwhile, the big faller of the week was AMD, which dropped by over 13 percent, despite some signs that the semiconductor market has bottomed out. It's not clear what AMD has done to deserve this fall in its share price, but it has risen a fair bit since the start of the year so maybe investors have decided that's far enough.