Bing-Yahoo set to shake up paid search, report says

Google remains the dominant force in pay-per-click ads with 80 percent of the market, but the new Bing-Yahoo team is already showing positive results for advertisers, says SearchIgnite.

Google still owns the market for paid search results, but the newly formed Bing-Yahoo team could "capture significant market share in the near term," according to a new report from SearchIgnite.

Among all search engines, Google's third-quarter share of the pay-per-click search market stood at 80.2 percent. That represented a gain of 7.9 percent in ad spending from the year-ago quarter and Google's "most dominant" market share since SearchIgnite started tracking companies three years ago, according to the market researcher's report released today.

In the same quarter, Bing's market share was 6.4 percent and represented a 21 percent growth in ad spending from the previous year. Yahoo's market share stood at 13.4 percent and marked a 10 percent drop in ad spending from the year-ago quarter. According to SearchIgnite, the results for Bing and Yahoo both were impacted by testing being done on the companies' new search alliance.

Overall paid-search ad spending rose 5.8 percent in the third quarter year over year. The market also creeped up each month during the summer, leading SearchIgnite to forecast a solid fourth quarter.

Bing and Yahoo recently began their transition in which Bing powers Yahoo's search results . Early results from the new partnership have so far shown positive results for advertisers, SearchIgnite said.

Click-through rates have increased and should continue to grow for ads generated through the combined Bing-Yahoo, an indication that the advertising is more relevant and effective than it was for Yahoo alone. And despite speculation that the cost of search ads would rise in light of the new team-up, SearchIgnite expects prices for Bing ads to inch up only slightly, further good news for advertisers.

SearchIgnite

As a result, ad prices may not increase much but higher click-through rates will generate greater revenue for the Bing-Yahoo team, forecasts the report.

"Google continued to increase its dominance in the paid search market in the third quarter," SearchIgnite CEO Roger Barnette said in a statement. "However, the Bing/Yahoo alliance is performing well for advertisers thus far, and marketers want to see a viable competitor to Google in the market. We feel that there is a real opportunity for Bing to capture significant market share in the near term if these early results continue to play out in the fourth quarter."

SearchIgnite has tracked more than 55 billion ad impressions and more than 1 billion ad clicks on Google, Yahoo, and MSN/Bing from January 1, 2006 through September 30, 2010.

About the author

Journalist, software trainer, and Web developer Lance Whitney writes columns and reviews for CNET, Computer Shopper, Microsoft TechNet, and other technology sites. His first book, "Windows 8 Five Minutes at a Time," was published by Wiley & Sons in November 2012.

 

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