By Michele Gershberg

NEW YORK (Reuters) - Yahoo Inc may be struggling to convince Wall Street of its future prospects, but for the first time its users gave its services overall a better rating than what Google Inc received, according to a study released on Tuesday.

Data from the University of Michigan American Consumer Satisfaction Index (ACSI) showed Yahoo had seen its customer satisfaction score rise 3.9 percent from a year ago to 79 out of 100 points, while Google's rating fell about 3.7 percent to 78 points.

While Google remains the dominant Web search engine, Yahoo's Internet presence is gaining user approval for its network of Web sites, e-mail, social networks and other features, according to the survey.

The positive perception of Yahoo stems from a relaunch of the main site and its various offshoots which are now gaining ground, said Larry Freed, chief executive of ForeSee Results, which sponsored the ACSI report.

"People have gotten comfortable with the (Yahoo) interface," he said. "They've also done a good job in continuing to be dominant in communities and sub-functions of the portal. That's always been Yahoo's strength."

While Google's search functions remain strong, when it comes to the Web, customers look for marked improvements from year to year to say they are more satisfied, he said.

"For the average consumer, what you see with Google is what you saw three years ago," Freed told Reuters.

While Google has developed its own e-mail, desktop office and chat applications, among other features, they have not drawn enough attention to them among regular users, he said.

"Google needs to figure out a way to take advantage of those great applications they've developed," Freed said. "Not necessarily through advertising, but better marketing."

Smaller rivals vary in their appeal to Web users.

IAC/InterActiveCorp.'s Ask.com search engine rose markedly in customer satisfaction ratings, up 5.6 percent to 75 points as it improved its search technology and embarked on an ambitious advertising campaign rare for the sector.

Time Warner Inc.'s AOL, which has moved its focus from Internet access services to become an ad-supported source of e-mail and entertainment, slipped more than 9 percent to a score of 67 points.

ForeSee said AOL's score was only slightly higher than the customer satisfaction levels earned by some U.S. government agencies also measured by ACSI, most notably the Internal Revenue Service tax authority.

The ACSI method uses data from interviews of nearly 70,000 customers to measure satisfaction with more than 200 companies in 45 industries. The Internet business data was compiled in the second quarter with at least 250 respondents for each company studied.
© Copyright 2007 Reuters.

Photo:
Bloggers upload stories about CES to the Yahoo! Tech page during the 2007 International Consumer Electronics Show (CES) in Las Vegas, Nevada January 9, 2007. Yahoo may be struggling to convince Wall Street of its future prospects, but for the first time its users gave its services overall a better rating than what Google received, according to a study released on Tuesday. REUTERS/Steve Marcus