Yahoo's Share Of The Search Market Has Fallen Below 10% For The First Time Ever

Marissa MayerREUTERS/Ruben SprichMarissa Mayer, Chief Executive Officer of Yahoo speaks during a session at the World Economic Forum (WEF) in Davos January 25, 2014.

The latest data from comScore on the state of search industry isn’t good for Yahoo.

Yahoo’s share of the U.S. search market is under 10% for the first time ever, says Ben Schachter of Macquarie Research. Yahoo’s actual share is 9.8%, its lowest ever. Yahoo’s share of the search market has been taking for the past nine years.

This is a big problem for Yahoo since its search business is lucrative. While Yahoo’s display ad business fell 7% last quarter, revenue from search was up 6% on a year-over-year basis. Revenue from search was $US428 million compared to $US436 million from its display ad business.

“With no apparent structural bottom in Yahoo’s search business, it is difficult to envision how Yahoo will be able to sustain the paid click volume growth it has reported for the past two years,” says Schachter. “We note that Yahoo’s reported search revenue includes its partner network; many of these partners were restricted by Google and thus switched to Yahoo (generating faster revenue and paid click growth). We believe that this is not sustainable, and we remain cautious on the long term structural challenges facing Yahoo in search advertising.”

Yahoo’s search business losses are Microsoft’s Bing search gains. Bing is at 19.2%, up 0.4% on a monthly basis. Google is at 67.6%, which is flat on a monthly basis.

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