Yahoo’s Q3 financial results are encouraging for the company, with display ad revenues growing, and overall revenues for the quarter rising by 12% to around $1.77bn (£866m).

Yahoo President Susan Decker said that the company’s global display ads growth exceeded expectations, with display ad revenues rising by 20% over the same period last year. Meanwhile, search revenues in the US grew 30% year on year.

In addition, revenues per search increased by 20% over 2006 for the search engine.

Meanwhile, a study by SearchIgnite and RBC Capital Markets has found that Yahoo is beginning to make ground on Google in the search ad market.

According to the study:
“While marketer spend increased quarter over quarter by 1.8%, marketers in the third quarter were apt to put their increased budget in Yahoo. Spending on Yahoo increased by 7.8% from Q2 to Q3 while Google only increased 0.8%, reversing previous trends.”

Yahoo increased its share of search media spending to 20.4% in the third quarter, up from 18.5% in the previous quarter, which some have credited to the success of the company’s new Panama ad platform.

Meanwhile, Google’s CPC has remained constant, though its eCPM, (revenue per thousand impressions) fell over the last two months, from $23.54 in August to $20.63 in September, despite recent algorithm changes by the search engine, which the report claims were made by Google to ‘improve the way they monetize advertisers in the first position by effectively allowing marketers to bid higher for Position One regardless of their quality score ranking.’

Meanwhile, Yahoo’s CPM for the same period rose from $9.32 to $10.07, according to the report.