Internet search is reaching an important pivot point, where market leaders are rewarded by Wall Street, laggards are punished, and start-ups try to fill niches left empty by the major players.

Though the market has seen a few leaders come and go over the last decade--anyone remember AltaVista?--few would doubt that a distinct top tier has emerged, occupied by Google, Yahoo, AOL and MSN.

Wall Street has certainly noticed, and it's rewarded the two standout companies--Google and Yahoo. As of the end of trading Monday, Google shares were up about 130 percent over the last year to $405.85, while Yahoo shares were up 4 percent to $40.47.

Google also is getting the bulk of business. Its search traffic rose nearly 30 percent to 83.3 million unique users in October from the year before. Yahoo search saw a 12 percent rise to 52.3 million unique users, according to Nielsen/NetRatings.

It's a case study straight out of business school: When a market gets to a certain point, the leader gets the biggest reward on Wall Street. The runner-up does OK too. But investors start losing interest in the little guys. InfoSpace's share price, for example, has dropped about 45 percent in the past year to $26.29, while Mamma.com and LookSmart shares have fallen more than 60 percent to $2.46 and $4.09, respectively.

Though there's still plenty of growing to do--indeed, some analysts estimate search advertising in the United States could grow nearly 80 percent in the next five years to $7.5 billion--the leaders are clearly established. Now they're building from their base into areas like Internet telephony and wireless access, and girding for a protracted market share battle.

Full article: CNET News.com