ADOTAS – Search marketing spending increased in the first quarter of this year, but spending growth slowed in March, raising fears about the second quarter, according to a report from SearchIgnite, a search advertising technology firm. But the most interesting statistics in the study were that Google lost share to Yahoo.
Yahoo gained significant market search spend share in the first quarter, primarily at the expense of Google. Yahoo’s share of spend grew to 24.2% in March from 19.6% at the end of the fourth quarter, while Google’s share declined to 70.4% down from 74.5%. Meanwhile, MSN’s share of search spend fell to 5.4% from 5.9% quarter over quarter.
“It was a stronger than expected Q1 for search marketing as advertisers continue to invest more money in the medium,” said Roger Barnette, president of SearchIgnite, in a release. “While search budgets have been relatively insulated from marketing budget cuts, some of the incremental dollars have been taken off the table.”
Google and Yahoo are both set to issue earnings reports this Thursday and April 22, respectively.
Concern about the health of Google’s business has been increasing through the first quarter as comScore continues to release negative reports about the search titan. This month was no exception: Google ranked #2 behind Yahoo for the total number of unique visitors in March. In February, comScore said that the number of clicks on Google’s ads were flat in January.
Yahoo is also being closely watched. Yahoo’s Jerry Yang has been touting reports of a healthy bottom line, saying Microsoft’s unsolicited bid doesn’t accurately reflect the company’s health – and that its first quarter revenue would grow between 8% and 17%. Microsoft’s Steve Ballmer, on the other hand, continues to argue that its takeover offer is fair – and even more valuable than when it was made on January 31, saying that Yahoo’s business is in a state of continuous deterioration.