A Little Class on the Internet: Do you Yahoo?

Thursday, February 08, 2007

Do you Yahoo?

vs.

Google is still the leader in online search advertising, but Yahoo is making strides to catch up. On Feb 5th Yahoo switched to a new search advertising system, named Project Panama. Until now Yahoo gave advertising preference to those willing to pay the most. The new system will allow advertisers to pay for search terms bases on the popularity of these terms. Advertisements are based on the content of a web page in an attempt to get more ads clicked on. As you can see, in many ways Project Panama is trying to emulate what Google has already.

In 2006 Google made approximately 4.5 cents to 5 cents on every search while Yahoo made only 2.5 cents to 3 cents a search. It’s no surprise that shares in Yahoo have been down, especially since the launch of Project Panama was delayed almost 2 months. Recently they are on the rise again, showing confidence in the new system.

While the new system will likely bring more revenue into Yahoo, it’s really unclear exactly how much more. They are certainly a company to keep an eye on as they try to make up for ground lost to Google.