Yahoo Gains Search (Ad) Ground Against Google

    October 16, 2007

According to a new study, search marketers are still giving far more money to Google than to Yahoo.  But when spending increases were presented as percentages, it turned out that Yahoo experienced a greater gain.

The data comes from SearchIgnite and RBC Capital Markets, and isn’t expected to make up for Yahoo’s otherwise unimpressive financial period.  Still, “While marketer spend increased quarter over quarter by 1.8% . . . . [s]pending on Yahoo increased by 7.8% from Q2 to Q3 while Google only increased 0.8%, reversing previous trends,” according to the two companies.

Yahoo needs to take victories where it can get them.  What’s more, there are reasons to believe that Yahoo could maintain these gains: Panama appears to be coming into its own, and an algorithm change on Google’s part (that SearchIgnite and RBC say “was intended to increase the price of bidding for first position”) had little effect.

Also, SearchIgnite and RBC believe they’ve taken seasonal oddities into account, so Yahoo’s success isn’t just an anomaly caused by back-to-school fluctuations.

Yet even if these findings don’t affect Yahoo’s earnings call, the discussion that takes place could affect them – if things go badly, search marketers may back away.