NEW YORK Yahoo Inc. (YHOO.O) Chairman and Chief
Executive Terry Semel said on Wednesday he was pleased with the
progress of a new Web search advertising system, launched to
better compete with Google Inc. (GOOG.O)
Semel, speaking at a media conference sponsored by Ad Age,
said the new system, known as Project Panama, would show "some
very exciting numbers" when Yahoo releases its first quarter
Panama, launched on February 5, is based on technology
that, like Google's, allows advertisers to pay for search terms
based on their popularity. It is key to Yahoo's strategy to
compete with faster-growing rival Google.
"We have said from the beginning and we say it clearly
right now, again, that our intention is to close the gap and
Panama is doing a great job," Semel said.
Web search advertising generates revenue for Internet
companies like Yahoo by placing ads in a user's search results.
Each time a user clicks on one of the sponsored links, Yahoo
collects a small fee, so improving the relevancy or increasing
the number of ads can help boost revenue.
Last month, a comScore Networks report showed Panama had
increased the number of people who click on links that pay
The report showed that the number of Yahoo search users who
clicked on ads -- known as the click-through rate -- rose 5
percent in the first week after the new system's debut and 9
percent in the second week.
"I'm totally all smiles," Semel said. "We are very excited
and very happy and I'm smiling broadly."
Yahoo executives have previously said Panama's ability to
draw more ad dollars from clients should accelerate growth in
the second half of the year.