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Yahoo grabs search-advertising slice from Google

Although it retains a huge lead, Google lost a slice of search-advertising market share to Yahoo in March, according to a Tuesday report by SearchIgnite.

As Google gears up to release its first-quarter results on Thursday, investors may find that its slice of the search-advertising pie shrunk in relation to Yahoo, according to a SearchIgnite report.

The report, released Tuesday, showed that while search-marketing dollars rose 28.5 percent in the first quarter over the previous year, the results within the three-month period appeared less encouraging. Sequentially, search-related advertising dollars fell 47.6 percent in January over the previous month, while February declined 33.5 percent and March 19.1 percent.

While the first-quarter sequential month-to-month decline could be expected, in part, due to seasonality issues, such as the marketing bonanza that happens in December, and the recovery and regrouping mode of advertisers in the New Year, SearchIgnite found an interesting statistic among the search players in the first quarter.

Yahoo increased its share of the search-advertising pie at the end of the first quarter, while Google and MSN were left with smaller slices, in comparison to what they all had at the close of the fourth quarter, according to the report.

Yahoo grabbed 24.2 percent of search-advertising dollars in March, up from 19.6 percent in December.

Google, while still retaining its huge lead over Yahoo and MSN, saw its market share drop to 70.4 percent in March from 74.5 percent in December. MSN's share declined to 5.4 percent from 5.9 percent during the same period.

But Google outperformed Yahoo on paid clicks for the month of March, according to a ComScore report.

And the search giant also outperformed the market during the same period, Imran Khan, a JPMorgan Chase analyst, said in a research note Tuesday.

Citing the ComScore results, Khan noted that Google's paid-click growth rose 2.7 percent in March, compared to year-ago figures, while the overall market declined 1.5 percent in the same period.

Yahoo's paid clicks also declined in March, falling 3.1 percent in comparison to year-ago figures, and MSN suffered a whopping 15.1 percent drop during the same period.

Before investors use these data points to hedge their bets over whether Microsoft will pay more to acquire Yahoo, keep in mind that the Internet search pioneer is slated to report its earnings April 22.