Google's gobbling Yahoo's search revenue share -- per Google/Yahoo earnings reports

Yahoo lost 11% of its search revenue share to Google during the first six months of 2009 versus the last six months of 2008, per Yahoo's and Google's 2Q09 earnings reports. 

• This time period comparison was selected because it represents most of the time period since DOJ blocked the Google-Yahoo ad partnership 11-05-08, where the DOJ concluded that Google and Yahoo had combined market shares of 90% and 95% in the relevant antitrust markets of search advertising and search advertising syndication. 

It is relevant, interesting, and instructive to analyze what has happened since the DOJ's 11-05-09 action, and since the economic downturn, given that the DOJ concluded Google and Yahoo commanded 90% and 95% market shares at that time.  

This relative revenue share transfer analysis is straight-forward.

• Yahoo's owned and operated search revenues were $874m in 2H08 and $758m in 1H09.
• Google's search revenues were $10,903m in 2H08 and $10,700m in 1H09.
  • (Note: I adjusted Google's total revenues down 3% in both periods to extract Google's non-search revenues.)
• Combining the companies' revenues and calculating their respective revenue splits, the relative Google-Yahoo share ratios were:
  • 92.6% to 7.4% in 2H08; and 
  • 93.4% to 6.6% in 1H09.
• Yahoo's 11% relative search share revenue loss results from 6.6%/7.4% = -11%.

Antitrust is fact driven and revenues generally are the preferred DOJ market share measure of choice to determine market power.

Google's and Yahoo's publicly reported earnings statements show that in just the last six months, Yahoo's search business has lost over 10% share to Google's increasingly dominant search platform. 

• If the DOJ concluded last November that Google enjoys substantial market-power reinforcing network effects, DOJ will likely conclude that this 1H09 market share loss from Yahoo to Google will likely continue or even accelerate, all other things being equal.