John

Yahoo! Gaining Market Share Against Google?

In News on April 17, 2008 at 5:08 am

So every one assumes that Google is king of the online Ad industry, and Yahoo! is a distant second. Well, it’s true, but according to a study published in the New York Times, Yahoo! seems to be doing some good over the past quarter. Ad revenue at Yahoo! grew some 57% in the first quarter, compared to Google, who only registered half that growth rate percentage.

In the long run, I still don’t see a change in the dominance of Google in this market, but it sure makes Jerry Yang’s case for a higher stock valuation more compelling and piss Ballmer off. Of course, that means we’ll all have to wait that much longer for the MicroHoo! saga to end. Yeeesh.

From The New York Times:

If the results of a study by SearchIgnite, a search advertising technology firm, prove representative of the broader search market, something unusual happened in search ads in the first quarter: Google lost share to Yahoo in the United States.

The report shows that spending by search advertisers on Yahoo grew a robust 57 percent while spending on Google grew only at about half that rate. That meant 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.

[…]

For its part, Yahoo’s earnings report will be closely watched to see whether Microsoft’s Steve Ballmer or Yahoo’s own Jerry Yang is right. Mr. Ballmer has argued that Microsoft’s takeover offer is even more generous now than on January 31, when it was first made, in part because Yahoo’s business has deteriorated further. Mr. Yang has said that’s not so, and has insisted that Microsoft’s offer undervalues Yahoo.

In mid-March, Mr. Yang told investors that Yahoo would meet its first quarter projections, which call for net revenue to grow at between 8 percent and 17 percent. Analysts say if Yahoo’s growth comes in at the low end of the range, the results will disappoint investors and will reduce any negotiating leverage Yahoo has with Microsoft. Conversely, if Yahoo’s growth is toward high end of the range, or higher, it will help Mr. Yang make the case that Microsoft should pay more.

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