Today could be a major turning point in Yahoo’s history. Later today, the company will launch its new online advertising system, called Panama, for all of its ad clients. After a long period of testing, Yahoo will have a system that should help it battle Google for paid search dollars.
Yahoo has lagged far behind the leader in search advertising. Google has turned that lead into a market cap of one-hundred and fifty billion dollars, and plenty of profits.
The difference between the two companies has been ad relevance. Yahoo has placed ads in its search pages based on how much advertisers pay for that placement. Google has always delivered ads that depended as much on quality as one keyword price.
Yahoo is imitating that model, even if C-E-O Terry Semel declines to agree. Ahead of Panama’s launch, Yahoo has told its advertisers that the high bid won’t always win. If a slightly lower bid with a better quality score is in the mix, that ad may get the top ad spot instead.
Yahoo needs to turn its advertising fortunes around with Panama, and make its customers and investors happy with the new ad system’s performance. If they don’t show progress this year, Semel may be tossed out of his corner office.
Well known marketing professional Andy Beal said no one should be in a hurry to see Panama make an impact on the bottom line. It will take until March to get Panama rolled out completely. When it is operational, Yahoo will expect to see revenue closer to Google’s four and a half to five cents per click, instead of the two and a half to three cents it sees now.
Rafat Ali at Paid Content expects Panama to grow beyond the world of search advertising. He said:
“(Panama) is intended to be flexible enough eventually to handle video and audio ads and to distribute ads to mobile devices. And while Yahoo gives few specifics, it says Panama will some day play a role beyond search advertising.”
Yahoo may expect Panama to smack down the threat of Microsoft and its Ad Center service. They better think again. Microsoft thinks Yahoo is arriving late to the party, and Ad Center took all of the door prizes with it when Microsoft left. Ad Center general manager David Jakubowski explained why to WebProNews:
“Yahoo is catching up with the rest of the industry, by only now adopting quality-based ranking. At the end of the day, Microsoft adCenter is continuing to push the industry beyond what is currently considered the gold standard.”
Google may not have any plans to discuss about online advertising today, but they have plenty of buzz anyway. Thanks to a blogger’s discovery on the Google Docs and Spreadsheets service, we now know Google has another Office like product in the works. It’s called Presently, and will allow people to create slide-based presentations like they can do in PowerPoint. Google has since taken down the evidence that was discovered, but not before it was copied and spread to plenty of other web sites.
The business social network LinkedIn may be thinking of going public. Company co-founder Reid Hoffman stepped down from his C-E-O role in favor of former Intuit executive Dan Nye. Hoffman remains chairman and president of products for LinkedIn. Although some were surprised by the move, LinkedIn spokesperson Kay Luo said in a statement that Hoffman interviewed 72 candidates for the job over the past four months, so this was not a sudden change.