• The Wall Street Journal , Monday, January 19, 2009 11:30 AM

This Thursday, the world will learn how the search advertising business fared during the fourth quarter when Google, which represents more than 70% of the business, reveals its earnings for the period. The Wall Street Journal, citing a new study, says the results aren't all that pretty, actually.

According to search advertising firm Efficient Frontier, U.S. search spending fell 8% in the fourth quarter from the same period in 2007. The company had been tracking mostly flat growth for most of 2008. This marks the first quarter of negative annual growth in all the years Efficient Frontier has been gathering search data, says James Beriker, president and CEO of the firm. Beriker said it was tough to predict whether the next quarter would be better or worse, but noted certain "encouraging signs."

It's unclear exactly what Efficient Frontier's findings mean for Yahoo and Microsoft, the Web's No. 2 and No. 3 search providers, respectively. Google held 76% of the search market in the third quarter, while Yahoo held 20%. Microsoft was a distant third, with 4.2%. Despite the Efficient Frontier study, most analysts are predicting that Google recorded double-digit growth in the fourth quarter. Meanwhile, researcher eMarketer recently projected that U.S. search spending would grow 14.9% in 2009,down from a growth rate of 21.4% in 2008.

Read the whole story at The Wall Street Journal »