With Panama, Yahoo seems to have found the right formula which is making its users click on the sponsored ads. According to AQuantive Research, the Click Through Rate (CTR) of Yahoo ads have increased by 10% after the introduction of new software. Panama seems to be throwing more relevant ads in front of the search audience leading to a higher CTR.
Yahoo is promoting the search marketing service heavily to the small businesses by offering an advertising credit with its hosting plans.
Yahoo which saw the sales growth in 2006 dipping to the lowest level in five years. Now powered with Panama, Yahoo should be able to cover up the gap with Google which is undisputed leader in Search and Contextual marketing at this point in time.
The success of Panama will certainly have a positive impact on Yahoo's revenue and the company may see a 20% increase in the revenue from search marketing in the second half of this year, according to UBS AG analyst Ben Schachter.
Yahoo had put in a lot of stake on Panama project which seems to be showing results now. The new challenge which lies ahead of Yahoo is Google's launch of PPA ads which look more attractive to advertisers.
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