Yahoo Earning More Search Revenue

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Yahoo Earning More Search Revenue

By: Jordan McCollum
2007-10-17

Its no secret: Google dominates search advertising (PPC). We often say that for anyone to legitimately challenge their dominance, theyll have to capture more of the search advertising market. (Of course, to do that, you usually have to catch more market share, which you usually do by advertising, which you usually do with the extra revenue. . . .)

Yahoo Earning More Search Revenue

And now it looks like Yahoo might have a chance. According to 500 marketers surveyed by SearchIgnite and RBC Capital Markets, search advertising was up 7% in Q3 this year"and most of that 7% went to Yahoo.

The researchers found third quarter spending on Yahoos percentage of media spend increased 7.8 percent over the prior quarter. SearchIgnite and RBC noted spending on Google for the same period increased only 0.8 percent. MSNs share increased from 5.1 percent in Q2 to 5.8 percent in Q3, but suffered a total spending drop of 3.4 percent.

And Yahoo kept beating Google in other ways:

The report also pointed out Googles increase in impressions was accompanied by a decrease in performance. Googles CPM dropped from $23.54 in August to $20.63 in September, says the report due entirely to a drop in click-through rates from 4.4 percent to 3.8 percent over that span. Meanwhile, Yahoos CPM for the period increased from $9.32 to $10.07 because its CPC rose from 55 cents to 58 cents, according to the report.

However, its not all good news for Yahoo:

Google gained steam when students returned to school, says the report, noting Googles share of impressions soared from 54.7 percent to 62.3 percent. At the same time, Yahoo lost ground, going from 39.7 percent to 32.6 percent.

The news may be too little, too late. Though they have conflicting stock ratings, the most recent is a hold rating received yesterday. Yahoos stock has begun to fall in anticipation of a lower Q3 earnings and revenue report after market close today. There are 9 days left in Yahoos 100 days, but shareholders arent optimistic.

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About the Author:
Jordan McCollum is a staff writer for the popular marketing blog Marketing Pilgrim. She has worked in search engine optimization with clients including 3M, Little Giant Ladders and ADP. After graduating from Brigham Young University, Jordan joined the SEO copywriting team at the Internet marketing firm 10x Marketing. After 10x closed its doors in December 2006, Jordan became a freelance writer and Internet marketing consultant specializing in SEO. She also has extensive experience with web analytics, conversion rate enhancement and e-mail marketing.

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