Google Paid Search Spend Rises 2% vs. Bing, Yahoo

Google's paid search share rose 2 percent for the third quarter, thanks to hiccups in Bing and Yahoo's paid search integration, Efficient Frontier said.

Google is reaping the early rewards of Yahoo's search integration with Microsoft, as the search engine saw its share of paid search spend rise 2 percent for the third quarter.

Web marketer Efficient Frontier said Google's share of paid search rose from 75.8 percent in the second quarter of 2010 to 77.9 percent in Q3. Paid search spend was up 21 percent from the prior year.

Google, which reports Q3 earnings Oct. 14, enjoyed paid click growth up 9 percent from the year-ago period. Google's cost-per-click and ad impressions are up 14 percent and 6 percent, respectively, from Q3 2009.

Microsoft Bing began powering Yahoo's U.S. search property in late August as part of a 10-year deal aimed at helping Bing chip away at Google's 65 percent U.S. search market share by powering Yahoo. Together, Yahoo and Bing command almost 30 percent of the U.S. search market.

As a result of the integration, Yahoo's paid search spend share dropped to 14.8 percent from its 17.5 percent plot in Q2, with Bing taking up the slack, growing from 6.8 percent to 7.3 percent.

However, while Bing is picking up clicks and spend at a strong rate, Efficient Frontier said Google could gain even more paid search share in Q4 as a result of the continued Microsoft-Yahoo integration.

"Google will likely see relatively significant gains in the fourth quarter as both seasonality and the Bing-Yahoo integration skew spend in their favor," according to the report, which added that the retail focus of Q4 typically favors Google in spend.

Official details about Google's paid clicks and other metrics should come during the company's Q3 earnings announcement Thursday.

Financial analysts expect Google to report revenue of $5.26 billion in the third quarter. That's up 3.3 percent from Q2 and up almost 20 percent from a year earlier.