Yahoo's revenue from its search business will decline 12.7% to $1.41 billion in 2016, according to data from eMarketer released Wednesday.
Since eMarketer's Q3 2015 forecast, the research firm reduced its projections for Yahoo's share of the global search market to 1.6%, from 2.1%.
Google's search business will rise $8.2% to $47.57 in 2016 compared with the prior year, followed by Baidu with a 26% leap to $8.71, and Microsoft with an increase 18.6% to $2.94 billion.
Advertisers in aggregate will spend $86.25 billion in search advertising in 2016, up from $74.72 in 2015, and $63.17 in 2014.
eMarketer Senior Forecast Analyst Martín Utreras doesn't expect to see much change in Yahoo's traditional search business. "A lot of the inventory is managed through partnerships with Microsoft and Google and we don't see those terms changing any time soon," he told Search Marketing Daily.
Yahoo's initiative to consolidate their display business "will hopefully simplify doing business with them and make those ads more relevant to consumers," he said.
Nonetheless, Yahoo's display business will decline 15.1% to $1.41 billion in 2016.
As for mobile search and display, if proven to be successful marketers will have another place to put relevant information in front of consumers, Utreras said.
When asked if there's an opportunity for advertisers to buy ads at a lower cost per click on Yahoo, Utreras sees a few factors affecting it. "Yahoo's search inventory is not going away, but at the same time it depends on how much demand there is from advertisers," he said. "On the display side, having less inventory will probably drive up prices, but again it depends on their success of attracting advertisers."
Overall, eMarketer estimates that Yahoo's total digital ad revenues worldwide will fall to $2.83 billion in 2016, from $3.28 billion in 2015. However, Yahoo's mobile business seems to continue to show signs of life.
In fact, it’s the only business seeing growth from advertising revenue. The company's worldwide mobile ad business will grow 24.5% this year to $1.31 billion. However, since Google and Facebook will continue to grow at larger percentages, Yahoo's share of the mobile market will shrink to 1.3%, compared with 1.5% in 2015.
Google continues to dominate the global digital ad market, growing net ad revenue by 9.0% this year. Facebook also will grow net ad revenue by 31.0%.