HURRY, MARISSA: Yahoo's Search Business Is Imploding, Taking Yahoo's Profits With It

Marissa Mayer

Photo: jdlasica

Pound the alarm!In September, Yahoo’s search business shrank 25 per cent from last year’s number.

That’s according to ComScore numbers analysed by Ben Schachter of Macquarie Securities.

Yahoo’s share of search queries dropped from 15.5% in September 2011 to 12.2 per cent last month. In August, its share stood at 12.2 per cent.

Over the past year, Google has gone from 65.3 per cent to 66.7 per cent. Microsoft went from 14.7 per cent to 15.9 per cent. 

“[T]he downward trend remains very well-established and supports our view that the long-term trajectory of YHOO’s search share is a significant concern,” Schachter wrote. “Most importantly, and unfortunately for YHOO, we see no obvious structural bottom for YHOO’s search share.  This is a significant problem in our view given the fact that search is a very high-margin business for YHOO and likely represents the significant majority of the company’s EBITDA.” 

The ComScore numbers don’t include mobile, which is an area where Yahoo is likely even weaker than on desktop searches.

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