Paid search ad gap shrinks between Yahoo, Microsoft in Q4: AdGooroo

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Microsoft Live Search saw a boost in its first-page advertiser growth rate in third quarter 2008, according to search analytics firm AdGooroo's latest report. Google remains the giant with an advertiser growth of 58% over the third quarter. Microsoft Live Search came in second with a growth rate of 42.3%. Yahoo followed with 8.8%.

The gap between Microsoft and Yahoo shrank between Q3 and Q4. Yahoo now only leads by 3% - with 19.4% to Microsoft's 16.4%. In Q3, Yahoo had 30.4% compared to Microsoft's 12%.

“Microsoft is really making great strides in increasing their first-page advertiser counts,” said Rich Stokes, president and chief Gooroo of AdGooroo, Chicago. He noted that in December. Microsoft's chief, Steve Ballmer, stated that having additional ad counts was a major growth strategy.

“This makes sense for them because one, their CPC becomes higher, and two, because your ads become a lot more relevant when you have a greater variety to choose from," Stokes said. "This drives not only paid search clicks, but also drives usage in general.”

AdGooroo expects a flattening out or a decline in advertiser accounts going into Q1, which it said is typical of post-holiday ad spend, according to the report.

When asked about search marketers' strategy going into 2009, Stokes said, “People need to be taking a good second look at Microsoft. They have compelling ROI from what we're hearing. And while volume has been a common complaint among its advertisers, I would guess that they're probably going to be addressing that in ‘09."

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