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Yahoo Finally Launches Project Panama

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The in-development advertising system meant to replace Yahoo’s current product arrived as part of the company’s third quarter financial announcements.

Yahoo had stated at one point that the new advertising solution, called Project Panama, would be deployed when and only when it was ready to go. Until today, that looked like a timeframe in early 2007.

The schedule moved up dramatically, as Yahoo disclosed it would roll out Panama now:

“While we are tremendously excited about many things happening at Yahoo!, we are not satisfied with our third quarter financial performance. We continued to grow and believe that we outperformed the graphical market but not at a rate that met our expectations,” said Terry Semel, chairman and CEO of Yahoo!.

“Looking forward, we are excited about the roll-out of our new Project Panama advertising platform. In addition, we plan to invest, innovate and secure leading positions in the areas where we see the biggest growth opportunities.”


Yahoo has lagged behind Google in search advertising revenue, a gap that has widened from 2005 to 2006. Part of that has been blamed on Yahoo’s contextual ad system not performing as well as Google’s when it came to matching advertising to search queries performed by people.

Project Panama was designed to help Yahoo narrow that gap, and make its paid search solutions more attractive to advertisers. Improved relevance would lead to stronger ad conversion numbers for advertisers.

The desired outcome would see those conversions lead to more competition for keyphrases, driving up prices and sending more profits to Yahoo.

Yahoo invited a handful of bloggers to see Panama in action, ahead of the public announcement. Barry Schwartz at Search Engine Watch was one of them, and he wrote some observations of the new system. He noted Panama is live for use now, with voluntary migration to take place through the end of 2006.

Andrew Goodman at Traffick also participated in the early preview. He provided thoughts on Panama in his blog:

As the Yahoo team acknowledged, the current DTC is like an unsophisticated spreadsheet. Google’s ranking algorithm and campaign reporting and setup features moved AdWords significantly ahead of Yahoo, where it stayed for nearly five years.

Today, Yahoo’s in the position of mimicking Google’s offering. So is it a me-too product? Well, from the perspective of our clients, that wouldn’t be so bad we like AdWords – it scales, and it works. Now YSM does too.

Key missing features now included in the new product are bidding by ad group and multiple ad rotation. Advertisers who migrate over will no doubt find these helpful and begin using them right away.


Now it falls to Yahoo to entice more marketers to Panama. Their strategies for doing so should become apparent in the coming days.

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David Utter is a staff writer for WebProNews covering technology and business.

Yahoo Finally Launches Project Panama
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