Monday, February 5th, 2007 by Andy Beal

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Yahoo Switching to Panama Platform Today

Monday February 5th, 2007, will be a day that goes down in search engine history. At 3pm PST today, Yahoo will bring together 30 to 40 engineers and start migrating the old Overture pay-per-click platform over to the new “Panama” model. Its future success or failure will depend on how well the new platform is received.

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.

There’s certainly a lot at stake. Not only does the new Panama platform bring a better opportunity for Yahoo to build market-share now, but as the New York Times explains, it’s a solid platform that can help Yahoo grow.

Yahoo says the system can be upgraded without disrupting it. It 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.

The full roll-out of the new platform is not expected to be completed until sometime in March and Yahoo warns investors not to look for any bottom-line impact until later in the year – as advertisers get used to the new bidding system. Still, having spent a lot of time speaking with the people behind Yahoo’s new platform build, I’m very confident that Panama will be a huge success for the company. Will it see Yahoo catch Google in terms of ad revenue? Doubtful. It will, however, give them an opportunity to better monetize the advertisers they have and should help them steal a few more away from their rivals.

If you’re a Yahoo employee, cross your fingers and grab your lucky rabbit’s foot. Today is a big day in Yahoo’s history.


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7 comments on “Yahoo Switching to Panama Platform Today”

  1. WebProNews Video Blog » Blog Archive » Yahoo has high hopes for Panama Says:

    February 5th, 2007 at 12:53 pm

    [...] http://www.marketingpilgrim.com/2007/02/yahoo-switching-to-panama-plat form-today.html [...]

  2. Panama Unlocks At Yahoo Today - Internet Insider Report Says:

    February 5th, 2007 at 2:59 pm

    [...] 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: [...]

  3. Angel Invenstment Journal » Blogs vs Big Media Says:

    February 5th, 2007 at 4:33 pm

    [...] I have been involved in the online marketing world since 1999 and that is the industry which I follow more than any other. Today, I saw a post from John Battelle talking about the release of Yahoo’s new Search Marketing product – Panama. He said it was covered more in depth at other sources. He included links to the New York Times, Time magazine and two industry blogs, one of which is run by one person. Do you know which ones I clicked on? I visited two of the links, but neither had the word “Time” in it. [...]

  4. Yahoo Panama Rolled Out Today (Finally!) » 10e20 - Search, Design & Social Says:

    February 5th, 2007 at 4:58 pm

    [...] What is the goal of this for Yahoo? Yahoo has rolled out the system in an attempt to catch up with Google. As Marketing Pilgrim puts it: 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. [...]

  5. SearchTheWeb2 Says:

    February 5th, 2007 at 6:31 pm

    It’s 3.30 pm PST, I’m still waiting.

  6. Panama Rising: Yahoo’s New Platform Live in US Today | Blog Posts Says:

    February 12th, 2007 at 3:47 pm

    [...] Is it too early to expect a Panama review from Tom Hale, Evan Roberts or Al Scilitani? Probably As Andy Beal reports: “At 3pm PST today, Yahoo will bring together 30 to 40 engineers and start migrating the old Overture pay-per-click platform over to the new ‘Panama’ model.” [...]

  7. Yahoo! Launches Panama Says:

    June 22nd, 2007 at 8:05 am

    [...] It appears as of 3 p.m. PT yesterday that the last layer of form and functionality has been revealed in Yahoo!’s Panama… the new and improved online ad network that concerns some search marketers… but, by and large, is welcomed with open arms. Another player in the contextual (via its Yahoo! Publisher Network) and search engine marketing arena – in addition to Google – is exactly what the marketplace is yearning for and Yahoo! will likely have a significant impact. [...]