Yahoo Search Market Share: From Worse to Worse…

Yahoo claimed 20.6 percent of all U.S. search queries in February, according to comScore (SCOR).

But a year from now it will claim just 17.51 percent or less, its share gutted by the loss of deals that once made Yahoo’s the default search toolbar on new Hewlett-Packard (HPQ) and Acer PCs. With those spots now claimed by Microsoft Live Search and Google (GOOG), respectively, Yahoo stands to see an estimated decline of 15 percent in search traffic, according to some reports.

A nasty blow for a company with a search volume as long in decline as Yahoo’s. Nastier when you consider that a fair portion of that lost traffic will end up with Microsoft (MSFT), which will also be accruing traffic from a similar toolbar deal with Dell (DELL). And nastier still, because Yahoo (YHOO) is certain to lose premium advertising dollars if its market share dips below 20 percent.

Yahoo, of course, disputes such suggestions. And it insists the loss in traffic it will suffer from its failure to renew these toolbar deals won’t be as high as that 15 percent figure.

We’ll see, I suppose. As one former Yahoo search exec told Dow Jones, “[toolbar deals are] the cleanest driver of market share. It’s a really important way to get in front of people.”