Project Panama receives its formal entrance to the commercial market on February 5th, providing a new ranking model for search marketing.

Paid search ads will be ranked by quality as well as keyword bid price once the first Monday in February arrives. Yahoo announced the launch date along with its 2006 fourth quarter and year-end financial statements.



The arrival will end a long wait by Yahoo customers and investors for a search advertising system that more closely emulates the wildly successful model used by Google for its AdWords clients. AdWords has pushed Google to a market cap of over $146 billion.



It's a place where Yahoo and its long time followers expected the portal company to be, leading the Internet in branded ads as well as paid search.



Google blew past them in contextual advertising, and it appears Google wants the display ad market as well.



Yahoo's old ad ranking model, where bid price defined where an ad would appear, will go away, buried by Terry Semel and Sue Decker. The extraordinary traffic Yahoo enjoys from online visitors every month will see relevant ads alongside the content they view.



If that relevance can bring clicks, and send along customers in greater numbers with better conversion rates, Yahoo should find more business coming its way. They could even gain some converts from Google's camp, especially if clicks and conversions can be had for a more competitive keyword bid.



Whatever one's feeling on Yahoo and its leadership may be right now, it is a given that greater competition for Google and AdWords would benefit the whole marketplace. The next six months might be well spent rooting for Semel and company to succeed.



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Tags: Yahoo, Panama



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