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Take Your Position: Yahoo!

Yahoo! reports earnings on Tuesday after the bell? How should you game this Internet underdog?

These results could serve as an another reminder why Yahoo Chief Executive Carol Bartz hates it when her company is compared with Internet search leader Google .

The comparisons usually make Yahoo look bad, and the third quarter isn't expected to be any different. If anything, the contrasting results almost certainly will show the already- huge gap separating Yahoo from Google has widened.

While Google's revenue growth accelerated for the first time since the U.S. recession started in December 2007, Yahoo is struggling to emerge from a financial slump that has been tormenting the Sunnyvale-based company since early 2006.

If Internet analysts are right, this will be the fourth consecutive quarter in which Yahoo's net revenue fell below the preceding quarter.

The main reason Google is doing so much better than Yahoo -- and most other companies -- is because it dominates Internet search, an activity that has turned into a highly effective marketing vehicle.

Advertisers aren't as hesitant to spend on commercial messages tied to search requests because they usually only cost money when a consumer clicks on a link. The requests also make it easier to figure out which people might be interested in buying a specific product or service.

So what should you expect? Analysts polled by Thomson Reuters, on average, predicted that Yahoo will earn 7 cents per share on revenue of $1.12 billion after subtracting commissions paid to advertising partners.

What’s the trade?

Don’t look at the absolute number, counsels Sanford Bernstein analyst Jeff Lindsay, look at projections instead. Expectations are in the basement. The bar is so low that if they just turn up, Yahoo! wins.

If the stock gets whacked on weak results, I’d get long adds Guy Adami.

I like the stock right here, counters Pete Najarian. I think the stock could go to $23. At $17 I see much more upside than downside.

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Trader disclosure: On October 19, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (BTU), (GS), (INTC), (MSFT), (NUE); Finerman Owns (AAPL); Finerman's Firm And Finerman Own (RIG), (PDE); Finerman's Firm Owns (MSFT), (NOK), (TJX); Finerman's Firm Owns (BAC) Preferred, (BAC) Call Spread, (BAC); Finerman Owns (BAC) Preferred, (BAC); Finerman's Firm Owns (BBT) Puts; Finerman's Firm And Finerman Own (WFC) Preferred; Finerman's Firm And Finerman Own (WMT); Finerman's Firm Owns (BKS) Puts; Finerman's Firm Is Short (USO), (IJR), (MDY), (SPY), (IWM), (UNG); Najarian Owns (GE) Calls; Najarian Owns (HGSI) Call Spread; Najarian Owns (POT) Call Spread; Najarian Owns (RIMM) Call Spread; Najarian Owns (STX) Call Spread; Najarian Owns (WFT) Call Spread; Najarian Owns (XLF) Call Spread; Najarian Owns (YHOO), Is Short (YHOO) Calls; Najarian Owns (TEX) Call Spread; Terranova Owns (HES), (HOC), (SUN)

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