The Little Engine That Could? Yahoo Paid Search Adds Video and Pictures, Trying for More Clicks.

Yesterday, Yahoo celebrated the fifth anniversary of the launch of its own search engine with some good news about its market share and by jazzing up its paid listings today with a plan to include pictures and video.

Will the “rich” ad search product work better, a digital little engine that could?

We’ll see, although it seems the troubled Internet company is already doing better without all the bells and whistles.

After years of declines, according to a new report from comScore, Yahoo’s share in the U.S. continued to scratch its way back slowly, from a low of 19.6 percent last June to 21 percent in January.

Better still, according to comScore (although not in other recent surveys like Nielsen), Google (GOOG) lost some juice, declining to 63 percent from 63.5 percent in December of 2008.

Microsoft (MSFT) search rose a tiny bit to 8.5 percent. But that’s still essentially pathetic for a company that is spending so much and trying all sorts of new iterations of its search product–from giving cash back to creating more niche search–to boost share.

For its part, Yahoo (YHOO) has decided to integrate images and video with its search ads, which have long been text-based. Yahoo has been working on various versions of this and other improvements to search for a year.

Both Google and Microsoft have tested similar versions, but have not launched them widely, for a variety of reasons.

Thus, it is Yahoo that will be first in a major rollout of what one company insider jokingly described to BoomTown as “a mutant marriage of search ads and display.”

Paid search, a business where advertisers pay for relevant links on a larger search page, has been largely dominated by Google, with Yahoo’s share one-seventh the size, even as it dominates in selling online graphical advertising called display.

But the display business has been hard hit in the weak economy as advertisers have pulled back drastically on banner advertisements and the like, and as evidenced by a decrease in that business that Yahoo announced in its most recent quarter.

Thus, the idea is now to apparently make paid search richer, giving it the cool-looking attributes of display and the more measurable qualities of paid listings.

But whether this yields better click-through rates on Yahoo–and, more to the point, fends off calls by investors to take a giant sum of money from Microsoft to hand over its search business–is still unclear.

Still, it’s nice to see Yahoo search–which also recently added a “search pad” for users to conduct online research more easily–trying to compete with a little more panache after, badly, copying Google for so long and with so little result.

In other words, after five years of losing, it’s about time for some new moves.