Project Panama's success is critical in Yahoo's effort to boost revenue and recapture market share from Google.
Yahoo's new search advertising system appears to be working. Since the introduction of Yahoo's new ad ranking model on February 5, the second phrase in the rollout of the company's Project Panama ad platform upgrade, Yahoo sites have seen better sponsored search click-through rates.
During the week ending February 11, 2007, the click-through rate for Yahoo-sponsored search ads rose 5% over the previous week, according to Internet metrics company comScore Networks. During the week ending February 18, 2007, the click-through rate showed rise of 9% over the baseline week of February 4, 2007.
"Yahoo's new search marketing ranking model is already having a positive impact on the click-through rates for Yahoo's search advertising," said James Lamberti, comScore senior vice president of media and search solutions, in a statement.
Yahoo also saw more clicks directed at sponsored search ads, which generate more revenue than algorithmically generated ones. Sponsored clicks represented 10.6% and 11.1% of total click volume in the weeks ending February 11 and February 18, respectively, up from 10.1% during the week of February 4, according to comScore.
Last month, during a conference call detailing Yahoo's Q4 2006 revenue, CEO Terry Semel predicted that Yahoo would see the revenue impact of Project Panama in the second quarter of the year.
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