Yahoo gave top billing to the advertisers who were willing to bid the most to have their ads listed alongside a particular search result

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(Continued) The RFS Newsletter, Feb. 10, 2007. Page 4
In its simplest form, Panama is Yahoo’s attempt to place ads right in front of users that are more likely to be clicked on. Up until today, Yahoo gave top billing to the advertisers who were willing to bid the most to have their ads listed alongside a particular search result. It's biggest competitor, Google, has a totally different formula which Yahoo is trying hard to replicate. It ranks ads on a mix of bid prices and relevancy to the user. That leads users to click on ads more frequently, and since advertisers pay only when a user clicks on their ad, Google, on average, makes more money on every search than Yahoo does.

Additionally, since Google is a lot better at matching ads with users, the system is more efficient for advertisers, creating an impetus that rewards Google with a very powerful edge. “I spend a majority of my dollars on Google,” said Amy Wong, global online marketing manager for the software security firm Trend Micro. “I’m glad to see that Yahoo is trying to get their act together.”

<<< Pr. page Next: Google managed to get hundreds of reader responses >>>

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