Panama Launch Imminent

Yahoo currently ranks search ads based on keyword bid price alone. The new search advertising ranking algorithm, called Panama, will rank ads both by bid and quality in an attempt to raise advertisers’ returns, especially those with relevant products and on target messaging.

Google’s AdSense ranks ads by keyword bid value too, but it also takes in to consideration the number of clicks the ad receives.

The Panama project is key to enabling Yahoo to close the gap on its main rival, Google. According to Nielsen//NetRatings, Yahoo's share of online searches fell towards the end of 2006, to 23.6 percent, under half of Google’s 50.8 percent share.

"Yahoo has not executed as well as Google, has not had as strong a software platform for advertising, but they're still a very strong No. 2 player and that's worth something," said Global Crown Capital analyst Martin Pyykkonen (via Yahoo News).

They say that a change is as good as a rest, so perhaps Yahoo can ride on the back of Google-mania and attract advertisers who are looking to trying something a little different.

Tags: AdSense, bid placement, Google, keywords, Nielsen//NetRatings, Panama, search marketing, targeted marketing, Yahoo