Google’s paid search costs rising

Google’s dominance of online search is becoming more entrenched and allowing it to push up its charges for paid search results, a new study has revealed.

According to Mediaweek, search tech company Efficient Frontier has analysed the source of clicks received by its clients for paid search and found that both the number and cost of clicks from Google increased in the December quarter of 2007.

It found that Google grabbed an even big share of the total spend on paid search towards the end of last year, picking up 77% compared to 71% at the same time in 2006.

By contrast, Google’s next biggest competitor, Yahoo, declined slightly, down from 25% to 24%, while MSN picked up just 1% to grow to 6%.

And the consequence of that growth in market share? Higher costs for Google paid search terms. Efficient Frontier’s research shows Google’s average cost per click surged by 22% in the December 2007 quarter compared to the same quarter in 2006, while Yahoo and MSN in the same period pushed up paid search costs by less than 3%.