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1/24/2007
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Yahoo To Debut Improved Search Ad Ranking Model Next Month

Ad quality -- how effectively the ad elicits consumer interest -- will be considered when determining where ads are placed on search results pages.

Yahoo plans to roll out its new search marketing ranking model on Feb. 5, CEO Terry Semel announced during the company's earnings conference call on Tuesday.

What's new? Ad quality -- how effectively the ad elicits consumer interest -- will be considered when determining where ads are placed on search results pages, in addition to search keyword bid price. In terms of ad placement, higher is generally better. Yahoo hopes this will make its ads more relevant to users, resulting in higher ad revenue for the company.

Google has used ad quality or ad performance as a metric in its online ad system, a fact that's widely seen as a major reason why Google's ad revenue has exceeded Yahoo's in recent years. When ads that generate little interest are monitored and automatically replaced by more popular ones, more people click on the ads, more products get sold, and the search advertising company makes more money.

Yahoo expects to see the financial impact of its recently upgraded search advertising platform and its improved search marketing ranking system toward the end of the second quarter of the year.

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