Yahoo Earning More Search Revenue

It’s no secret: Google dominates search advertising (PPC). We often say that for anyone to legitimately challenge their dominance, they’ll 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. . . .)

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 Yahoo’s 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. MSN’s 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 Google’s increase in impressions “was accompanied by a decrease in performance.” Google’s 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, Yahoo’s 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, it’s not all good news for Yahoo:

“Google gained steam when students returned to school,” says the report, noting Google’s 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. Yahoo’s 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 Yahoo’s “100 days,” but shareholders aren’t optimistic.