Yahoo's (YHOO) Search Share Likely To Continue Its Decline

Yahoo Inc. (Nasdaq: YHOO) failed to renew toolbar deals with two computer makers which may cause it lose up to 15% of its search traffic over the next 12-to-18 months, according to Dow Jones.

Yahoo would have remained the default search tool on new Hewlett-Packard (NYSE: HPQ) and Acer computers if it was able to renew the toolbar contracts with these companies. The failure to renew these contracts could cost the company as much as 3% of the U.S. search market share. According to comScore, in February, Yahoo conducted 20.6% of U.S. online searches,

Yahoo did acknowledge to Dow Jones that losing the deals could cost it share, but said the estimate of 3% points is too high. Yahoo needs to maintain market share above 20% because below that level, advertisers are less willing to pay premium dollars to be on a particular search engine.

Yahoo's revenue growth has stagnated over the past few years, as Google (Nasdaq: GOOG) has taken much of the search traffic.

Microsoft's Live Search toolbar replaced Yahoo's toolbar on Hewlett-Packard computers, while in October, Google replaced Yahoo as the default search box on Acer machines.