As was the case with the comScore search ratings discussed yesterday, the Hitwise ratings show that Google continues to rule the roost with a wide margin. According to Hitwise, Google holds 87.3 percent market share in the U.K., which is only marginally lower than their share in April 2008, and the main competitors, Yahoo! and Microsoft are far behind.

Similarly in the U.S.A, Google Search accounted for 68.3% of the market share, while Yahoo! received 20% and Microsoft had only 5.9% of total search traffic.

comScore, who have only released results for the month of April 2008 so far, show that Google holds a 74.4% share of the UK search market, while Yahoo! has 4.3% and Microsoft has 3.4% respectively.

While the variation in numbers between the results of different sites is understandable, as each group has different parameters to follow, what is common among all the results, is the obvious sway that Google continues to hold over the market.

Media planners, website owners and advertisers will not be particularly pleased with this discrepancy, though, as a difference of 13 percent in market share reported for Google search traffic to a site that receives 1 million visitors per month can mean a difference of 130,000 visits / ad impressions / clicks from Google. Such large discrepancies can make planning media campaigns for new sites quite difficult.

On the whole, though Google continues to make major gains in the online video, sports, business, finance, entertainment, social network and travel sectors.

PayPal and Google Checkout are both services provided by eBay and Google respectively to enable online shoppers to pay for their shopping easily. While PayPal has been around for a long time, Google Checkout was launched only in April 2007.

While PayPal has the advantage of a wider user network it is not without its fair share of customers complaints. The main grievances customers have with PayPal are their high fees and their policy of freezing customer accounts, without calling or trying to understand the nature of the clients’ business, on usually flimsy grounds.

EBay users and other online vendors have looked for alternative payment methods for long now, and are extremely hopeful that Google Checkout will at least cause PayPal to wake up and correct their arbitrary practices and become more customer friendly.

According to Heather Dougherty of Hitwise US, alternative payment methods have been growing in popularity, at the expense of established players such as PayPal and Google Checkout. Leading this group is newcomer Bill Me Later, whose ‘buy now, pay later’ and ’90 days same as cash’ options have propelled its traffic up 271% up from last year.

While the Google Checkout and PayPal are direct competitors, their manners of functioning are slightly different and their main client bases come from widely different sources. PayPal sources its clientele mainly from its parent company eBay and a few other email and social networks, with only about 2.2% of their customers coming from non-auction shopping and classified sites, while 45.3% of Google’s customer base is retailers.

It is expected that Google checkout will gradually incorporate a few new features in its services, which will make it a real threat to PayPal’s dominance of the market, especially through the much wider user base of its parent company, Google.

Google now accounts for more than 85 per cent of all searches in the country. Their market share is still growing, and it continues to do so at the expense of all three of its competitors.

The chart below shows the latest UK Internet search data from Hitwise for the four week period ending 20 September 2007 compared to four weeks ending 26 May 2007:

Source: Hitwise UK

Ask, Microsoft and Yahoo! have clearly lost market share to Google, in spite of each of their individual efforts to win UK search clicks. Ask has invested in an ongoing television and billboard advertising campaign in the UK. Yahoo! has tried to generate a lot of publicity around their Panama platform, and Microsoft has rebranded and tried various half-hearted and wholly unsuccessful tactics.

Google’s lead has gone beyond the point where quality alone will win back users. Ask’s current search interface is far superior to Google’s Universal Search. It still has not won back any market share, partly due to poor quality of the main text results, but also because hardly anyone has even bothered to try using their improved interface.

Similarly, an improved advertiser experience alone will not win search traffic away from Google. Microsoft and Yahoo! should focus on winning search traffic before trying to woo advertisers.