Yahoo (YHOO, $19.38, down $0.05) has dipped below $20 again and it may be time to start nibbling on a small position. The stock has taken a back seat to the financial sector right now and it may be a good time to take advantage of the drop below $20. We all know when it comes to online search, Google (GOOG, $4865.99, down $4.51) is king. The numbers were just released for July and it showed that Google is increasing its share of the U.S. online search market. Google now commands 60% of the market, up 16%, as rivals Yahoo and Microsoft (MSFT, $27.39, up $0.07) each saw their respective shares decrease. Yahoo’s search share drop 11% from a year earlier to 17%, and Microsoft saw its share drop 10% to 12%. Microsoft has seen this coming as it feverishly tries to play catch-up. The latest numbers show just how important it is for both companies to do something now in order to gain ground, or in this case reclaim lost ground, on Google in the lucrative online search advertising market. Yahoo can’t do it alone and there are other companies besides Microsoft who may jump back into the frey to acquire Yahoo. Either way, Yahoo should get some interest from the market at current levels. Timing is everything and we are going to “layer” this trade in case we need more time for it to develop. The Yahoo October 20 calls (YHQJD, $1.50, unchanged) look attractive here for a half position and the January 22.50 calls (YHQAX, $1.45, unchanged) for the other half. I think Yahoo will make a move back above $20 once interest starts to pick back up in the stock. Rick Rouse]]>