It’s go time for Panama, the massively updated, long-awaited, advertising system Yahoo will debut this afternoon to its full complement of advertising clients.
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Editor’s Note: Today’s article by Murdok reporter David Utter includes a related video focusing on Yahoo’s Panama launch. The video is a new feature that will be in various Murdok articles. Often, the videos will include exclusive interviews with newsmakers. Today’s video introduces Murdok video reporter Nicole Eggers.
Yeah, were runnin’ a little bit hot tonight.
I can barely see the road from the heat comin’
off of it.
Ah, you reach down, between my legs,
Ease the seat back.
— David Lee Roth gets really excited about Panama, 23 years ahead of its release.
Greater relevance of paid search advertising should lead to more ads being clicked. All of those clicks can add up to more than increased profitability and greater revenue for Yahoo’s search marketing arm. It could save Terry Semel’s CEO seat, or at least let him depart on his terms should he choose to do so.
Yahoo won’t have the system fully rolled out until March, according to marketing kingpin Andy Beal. He cited some figures that could amount to big-time net income if Yahoo can at least approach them this year:
Thousands of advertisers, and billions of dollars in ad spending, will be watched closely, as Yahoo finally moves from the pure “highest bidder wins” model, to the “bid plus quality” model. By making this switch, Yahoo hopes to increase the average revenue per click from 2.5/3 cents to something closer to Google’s 4.5/5 cents.
As successful switch could mean the difference between Yahoo’s road to a comeback, or instead, further languishing behind Google – and facing a strong challenge from Microsoft’s adCenter.
Microsoft has presented itself as unimpressed with Yahoo’s late arrival to the ad relevance game. While Microsoft may be as good on the technology side, or better, than Panama, they don’t have second place in search market share behind Google; Yahoo does.
Semel and other Yahoo executives don’t expect Panama to make an impression until later this year. Impatient investors will want to see the money sooner. Solid results from Panama leading to a Yahoo comeback in the stock market will have people lauding Semel for his leadership.
If the numbers aren’t so impressive, they will call for Sue Decker to take over and for Semel to head back to Hollywood and rejoin his old pal Lloyd Braun in the content creation business. There’s a lot riding on Panama. Either way, we will look back at this date in Yahoo’s history as an important one.
We just don’t know the context yet.
Watch a video on Yahoo Panama featuring Nicole Eggers …
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David Utter is a staff writer for Murdok covering technology and business.
