Yahoo's Paid Inclusion Game (GOOG, MSFT, YHOO)

 |  Includes: GOOG, MSFT, YHOO
by: David Jackson

Search Engine Watch reports on a survey of 553 search engine marketing customers conducted by Radar Research and Intellisurvey. Key points:

  1. The North American search engine marketing industry has grew from $4 billion to $5.75 billion in 2005.
  2. Paid placement (ie. purchase of ads next to search results) accounts for 83% of total search engine marketing spending.
  3. Paid inclusion (ie. inclusion of an advertiser's URL in actual search results without notifying the user that the link has been paid for), offered only by Yahoo, accounted for $246 million or 4% of overall spending. But 38% of respondents said they used it.
  4. Search engine marketing technologies, including leasing, agency solutions and in-house development accounted for $90 million, or less than 2% of overall spending.
  5. Market share data: 95% of search marketers advertise with Google, 60% with Yahoo, almost a third with MSN.
  6. Contextual advertising: 46% of search marketers are using Google AdSense and Yahoo! Search Content Match.

Full article here.

Stock-related take-away? This is the first estimate I've seen of Yahoo's revenue from paid inclusion. $246 million is quite a sum. Is it at risk, given that paid inclusion is a somewhat questionable practice?

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