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Yahoo CEO Carol BartzNew Yahoo CEO Carol Bartz certainly has a lot on her plate.

Despite the fact that the company she leads still has considerable assets that can be built upon, Yahoo first has to get on the right path.

The latest evidence that it's still headed down the wrong path: in Q4 2008, as search advertising spend increased 11% in the UK, Yahoo's UK market share dropped a whopping 40 percent from the same period a year ago according to Efficient Frontier's Q4 Search Engine Performance Report. Yahoo's market share in Q4 2007 was 13.9% and that decreased to 8.4% in the span of a year.

The big winner: Google. Its market share rose from 82.6% to 88.2%.

A major contributor to this the growth was a massive growth in spending on Google's content network, which was up 300% YOY. Yahoo shuttered its content offering in Europe earlier this month to focus on its search and display offerings.

If Efficient Frontier's client services director Jonathan Beeston is correct in predicting that search advertisers will look to diversify, including through content networks, and that Google will experience the most growth in this area, Yahoo's decision to abandon its content offering in Europe, coupled with its overall marginalization in the region, may be especially painful.

That said, Yahoo isn't going to make a comeback by trying to do everything at once so perhaps refocusing its efforts on one or two markets (such as the US) might be the right approach under the circumstances.

Patricio Robles

Published 30 January, 2009 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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