"The lift in Yahoo's cost per click (CPC), along with a steady click-through rate (CTR), is quite impressive," said Jordan Rohan, managing director and Internet analyst at RBC Capital Markets. "The data suggests that Yahoo's platform improvements are taking hold at some level. This news should be encouraging to marketers hoping for a more balanced competitive landscape in the paid search space."

"Yahoo found its footing this summer, improving in most metrics, and showing more momentum relative to Google for the first time in a long time," said Roger Barnette, President of SearchIgnite. "As we get deeper into Q4, it will be interesting to see if marketers will continue to find more value in Yahoo's platform as they seasonally increase their search spending."

SearchIgnite and RBC Capital Markets' joint white paper "Summer Heats up Yahoo,"   reports that spending on Yahoo increased by 7.8 percent from Q2 to Q3 while Google only increased 0.8 percent, reversing previous trends.

SearchIgnite/RBC says it also identified a seasonal shift surrounding the school year that had previously been masked due to Google's rapid growth over the past few years. "As Google's growth trajectory flattens due to market saturation and maturation in broadband penetration, trends related to search volume surrounding the school year are beginning to emerge. SI/RBC identified drop-offs in Google's percentage of ad impressions between April and May (end of college semester) and then again from May-June (end of school year).

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"July and August were Google's lowest months relative to Yahoo impression volume, but then its share of impressions rebounded in September as school resumed. By the time school was back in full swing, Google recaptured its lost market share as its percentage of impressions increased dramatically."

However, while advertising inventory increased due these increased impressions, marketers did not follow as quickly. "Yahoo was able to increase its share of total search media spend to 20.4 percent in 3Q, up from 18.5 percent in 2Q, marking the first reversal in share since the initial February up-tick related to Panama. Google's CPC remained flat and eCPM (revenue per thousand impressions) fell between August and September despite a new algorithm change in late August that was intended to increase the price of bidding for first position."

This study claims to have tracked billions of impressions and millions of clicks on Yahoo, Google, and MSN from January 1, 2006 to September 30, 2007 across more than 500 marketers, all of whom are clients of SearchIgnite directly or via its sister company 360i.

The white paper is the fourth in a series of quarterly reports that tracks results across the engines. SearchIgnite/RBC say that subsequent reports will start to reflect budgetary decisions that search marketers are making regarding their budget allocations across the major search engines, reflecting the longer term economic impact of the Panama release.