Yahoo CEO Terry Semel told an audience of ad industry executives last week that he was all smiles about its new ad system, Panama. Here’s why: Click-through rates on Yahoo ads rose 10 percent compared with the old software, according research from digital ad agency AQuantive.
UBS AG analyst Ben Schachter tells Bloomberg that after initially doubting any revenue increase for Yahoo this quarter, he’s been surprised that Panama is “working quicker and better than people had expected.’’
As a result, Schachter says the gains may boost Yahoo’s revenue growth from searches to more than 20 percent in the second half of this year, instead of his previous estimate of 15 percent.
So far, Semel is making good on his promise to close the gap on search ad revenue with Google, which is on tap to post net sales of more than $12 billion this year compared with $5.47 billion at Yahoo, according to a Bloomberg survey of analysts.
Click-through rates on Yahoo ads rose 5 percent in the week after Panama’s debut on Feb. 5 from the week before, according to ComScore. The rate rose 9 percent the following week.
Yahoo trails Google in web searches, which could limit how much Panama closes the gap between the two. Google received 48 percent of searches in the U.S. in February, up from 42 percent a year ago, and Yahoo was little changed at 28 percent, ComScore figures show.
Related:
-- Yahoo’s Panama Ad-Ranking To Launch This Week