Yahoo Launches a New Internet Ad Strategy

Yahoo Inc. is introducing a new on-line ad sales strategy. The innovative system is regarded as an opportunity for investors to speed up revenue growth and provide a push for its shares.

The system, called Panama, is to be launched in the United States on February 5, outrunning the expectations of Wall Street. Introducing the ad system, Yahoo follows the steps of Google Inc., the leading Web search engine. Yahoo is applying the technology based upon the principle that advertisers pay for search terms according to the demand their ads enjoy. With help of Panama, advertisers will be able to address their ads specifically to a denoted group of Web users or interchange ads after determining the degree of their success.

Google has been providing its advertisers with the mentioned services for already several years. Analysts predict that Yahoo has good chances to catch up with Google, although the latter has an advantage of a better executive system and a stronger software platform. The success of the Panama system is estimated to increase Yahoo's revenue to almost 20 percent by the end of the current year that would be higher than the result forecasted by Yahoo specialists.

Last year Yahoo faced a 15 percent decrease of its shares' value. It is explained by difficulties the company had to overcome - delays to the Panama project and the necessary changes in the management structure. In its turn, Google shares reached about 16 percent increase.

On Tuesday the Yahoo executive board held a conference to bring up the issue of the fourth-quarter results. It turned out that advertisers demanded the Panama system faster than Yahoo even expected. Consequently, the money contributed by the clients into advertising should fasten the revenue growth in the second part of the year. The full year revenue forecasts should reassure the investors who were preoccupied by the Yahoo's results of the first quarter.

The fourth-quarter brought Yahoo 61 percent net income decrease - that is 269 million dollars. As for 2007 revenue the company forecasts 4.95 billion to 5.45 billion dollars. It should be compared with the forecasts of analysts that expect 5.20 billion to 5.92 billion dollars.
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