Posted April 18, 2007 10:13 am by with 4 comments

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Perhaps Yahoo CEO Terry Semel should have known better than to give Wall Street any signal that the new Panama platform was working well. When he said…

“We expect some revenue from Panama to begin to hit in the second quarter and to pick up dramatically in the following quarters. It’s working like a charm.”

Analysts translated that into “you should absolutely expect it to increase our revenues in Q1, even though it would have been launched for less than 2 months.”

I’ve spoken to an number of investment firms about Panama and I tell them the same thing. Yahoo’s new platform is a great improvement over the old one, and will eventually get their earnings per search query in line with Google’s. I didn’t expect much in Q1, simply because it takes time for any new bid platform to become familiar to users, and for them to figure out how to maximize their campaigns. Sheesh, I’m not an analyst and even I figured out Panama wouldn’t do much this quarter!

Alex Pham at the LA Times explores Yahoo’s Q1 numbers further. Generally, Yahoo missed Wall Street’s expectations for earnings per share, despite increasing revenue 9% from $1.57 billion to $1.67 billion.

  • But do you think the expectations were based solely on Panama? I think that Yahoo should have done better in other areas and that their earnings should not be pinned solely on the performance of Panama.

  • @Mark – most of what I read suggests they expected too much out of Panama. Outside of Panama, most of Yahoo’s new partnerships were announced late Q1, so we probably won’t see any impact from these until late Q2.

  • I think it\’s only fitting that Panama play a big part in the decline, since (IMHO) they pushed the release out early to cushion the fall of YHOO and let the advertisers shake out the bugs. But what the heck do I know? I had to use a calculator to answer the spam protection question.

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