The paid search market is still being dominated by Google, a new report has concluded.

Google’s share of all advertisers using pay per click services in the last quarter of 2008 was almost 81 per cent, compared with 16.4 per cent for Live Search and 19.4 per cent for Yahoo!, according to AdGooroo.

Both Google and Live Search increased their market share compared with the previous quarter, but Yahoo! experienced a significant drop.

"The clock is ticking for Yahoo! With rapid erosion in advertiser share, their market power is slipping away by the month," AdGooroo said, commenting on recently renewed speculation over a possible Microsoft acquisition of Yahoo!.

Google was also found to be displaying 58 per cent more first-page ads than in the third quarter, with Live Search’s ads up by 42.3 per cent and Yahoo!’s by 8.8 per cent.

Furthermore, the report revealed the top advertisers for each search engine, with Amazon seeing the highest number of ad impressions on all three services.

US firms spent 12 per cent on paid search marketing in the fourth quarter of 2008 compared with the same period in 2007, according to SearchIgnite.

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