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Yahoo!'s official snub of Microsoft's initial offer means that an acquisition might take longer or take a different direction altogether. But Yahoo! remains fundamentally attractive for its position in the search market.
There is no escaping that Google dominates search. The company's portion of US search advertising spending grew among the top three search engines from the fourth quarter of 2006 to the fourth quarter of 2007, according to Efficient Frontier.
Google's rivals have not been sitting still.
The launch of Yahoo!'s Panama platform increased the company's ROI by 39.4% during the period studied, according to Efficient Frontier.
Efficient Frontier also said that MSN lead the major search
engines in average click-through rate and ROI. The research company credited this to MSN's smaller number of
advertisers, making for less competition and commensurately stronger
performance for advertisers.
Every percentage point of market share matters in search advertising. Although eMarketer projects that US search ad spending growth will cool off through 2012 compared with recent years, search will remain the largest portion of the US Internet ad spending market.
Paid search reached a 40% share of total US Internet ad spending in 2004. Since then, and going forward, online advertisers have and will
put about the same percentage into search.
Online advertisers have a vested interest in the outcome of any industry consolidation. Although many are happy with Google, others worry about its market dominance.
This desire for a Google alternative will help keep its rivals viable, even if they end up consuming each other.
Get an in-depth look at social network ad spending. Read eMarketer's Search Engine Marketing: User and Spending Trends report.
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