San Francisco — Latest industry statistics released Tuesday showed something unusual happened in search ads in the first quarter: Yahoo Inc. may well have began gaining share in the Web search ad market against Google Inc. even as Google’s share of search audience inched up.
The Internet behemoth, which is in the sufferings of a takeover battle with Microsoft, showed its worth when it posted a 57.6% growth in search ad spending in the first quarter compared to a year ago, according a study released Tuesday by SearchIgnite, a paid search management technology solutions firm.
The report illustrates that spending by search advertisers on Yahoo grew a strong 57 percent while spending on Google grew only at about half that rate. This indicates Google’s total share of search ad dollars declined slightly to 70.4 percent, while Yahoo’s rose to 24.2 percent. Microsoft’s declined slightly to 5.4 percent.
“It was unusual and unexpected,” said Roger Barnette, president of SearchIgnite.
In the meantime, another report from research firm comScore showed Google gaining share against Yahoo in the overall Web search market in March, but gave no insight into how Google was doing converting Web searchers into ad viewers.
That increase helped Yahoo! improve its marketshare of search ad spending to 24.2% from 19.6% in the first quarter compared to the same period a year ago. By contrast, Google’s share of the market fell to 70.4% from 74.5%, and Microsoft’s share fell to 5.45% from 5.9%.
On the whole, search ad spending was up 28.5 percent in the first quarter but SearchIgnite noted that spending could slow in the second quarter.
“Yahoo increased its share of wallet meaningfully for the first time in several quarters,” RBC analyst Ross Sandler said in a note to investors, referring to the SearchIgnite data.
Google is scheduled to report quarterly results on Thursday as investors’ argue whether the company’s fiery growth in search advertising has begun being hobbled by a slowing economy.
“All three companies are reporting their earnings in the coming week: Google on Thursday, Yahoo! on April 22 and Microsoft on April 24.”
“If these numbers are an accurate reflection of the market, it could lead Yahoo to surpass expectations,” Barnette said. But Barnette pointed out that Yahoo on the whole had a weak first quarter in 2007, as it launched its new search advertising system, which could make the 2008 comparison unusually flattering.
The possibility for search ad spending growth is the main reason for Microsoft’s unrelenting drive to acquire Yahoo! The Internet giant has rebuffed Microsoft’s $31-a-share, as it seeks other options, including talks about a deal with Time Warner’s AOL.