The idea was simple and logical. If an individual searches for golf clubs on the internet, it only makes sense that vendors selling golf clubs should advertise on a search engine to bring in more customers.

The recent demand for search advertising has produced serious competition between the two main internet search engines, Google and Yahoo.

Currently, search advertising is an $8 billion global industry, and its worth is expected to sky-rocket to nearly $22 billion in the next five years. No wonder the two major search engines are both still going strong. Both Google’s AdWords and Yahoo Search Marketing (YSM) offer search advertising by allowing advertisers to bid on space identified with keywords and adjacent to search results. The key to the development of their head-to-head lies within the differences in their network connections and business philosophies.

When Yahoo’s top executive, Terry Semel, joined the company four years ago, he brought with him a long list of Hollywood contacts, and Yahoo has recently starting building a headquarters in Hollywood. Semel is a no-nonsense businessman and doesn’t play around, implementing tough discipline in management into the company. Yahoo is beginning to lean more toward being a media company, rather than an innovator of technology. Their focus has, therefore, shifted to traditional, handholding partnerships with ad agencies.

Google, on the other hand, focuses on the individual potential of their staff. They depend on their engineers to come up with innovative ideas for the company, and therefore expect them to spend one day a week on a special interest project of their own. Google has some of the top engineers in the country under its belt, and continues to attract them. Their focus is technology and innovation, and the Google executives are well aware of the fact that they must remain innovative to stay on top.

Recently, as most know, Google acquired YouTube in an effort to expand its advertising market to video advertising. Now Google again expanding its borders and upping the ante. They are currently in the test phase of an online marketplace that will allow advertisers to bid on print-ad space in more than 50 major U.S. newspapers, including The New York Times and Denver Post, The Washington Post, The Boston Globe and the Chicago Tribune.

And Google’s leaps forward are beginning to leave Yahoo in the dust. Though Yahoo had maintained an edge for some time, a Web tracking firm recently showed Google forging ahead of Yahoo as the number one search engine. Google’s stocks are currently only ten percent below their all-time high, while Yahoo’s stocks have plummeted nearly 40 percent this year.

Advertising agencies tend to lean toward Google based on the fact that Yahoo has a tendency to be a late-bloomer when it comes to innovations, such as blogs and video. For example, Yahoo’s much anticipated new search technology for advertisers, dubbed “Panama,” was due to take flight this summer, but has already been delayed with an unspecified release date.

Critics expect Google to eventually hit a rough spot as their innovations begin to dwindle. However, considering recent and upcoming developments in Google’s advertising industry, I don’t foresee that happening any time soon. If you’re seeking search advertising as a marketing option for your company, it appears that Google is currently the way to go.

What’s your experience with Google and Yahoo search advertising? Please share your experiences and comparisons.

Sources/Related Readings:
•News.com: Google vs. Yahoo: Clash of Cultures
•CNNMoney.com: Yawns for Yahoo, ga-ga for Google
•Business Week: Google’s New Frontier: Print Ads
• Forbes.com: Google vs. Yahoo!

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