Thursday, January 25, 2007

Yahoo's New Ad System For Websites by 5 Feb

Yahoo Inc.'s progress in launching a new Internet ad sales system could be a turning point for its shares as investors bet on faster revenue growth, analysts said on Wednesday.

Yahoo shares rose 8 percent on Wednesday and lifted rival Internet sector companies after it said its new system, dubbed Panama, would be fully introduced in the United States as of February 5, about a month ahead of Wall Street expectations.

The ad system brings Yahoo in closer league with Web search leader Google Inc. , honing the technology that allows advertisers to pay for search terms based on their popularity.

Panama also helps advertisers target the ads sent to specific audiences on the Web or rotate ads based on their effectiveness, capabilities Google has offered for several years.

"Yahoo has not executed as well as Google, has not had as strong a software platform for advertising, but they're still a very strong No. 2 player and that's worth something," said Global Crown Capital analyst Martin Pyykkonen.

"I'm not forecasting any kind of wholesale shift here, that all of a sudden Google is going to fall by the wayside ... but I do think they (Yahoo) will narrow the gap," said Pyykkonen, who rates both company shares "overweight."

If Panama gained momentum, Yahoo's revenue growth could rise to a high-teens to low-20s percentage rate by the end of 2007, Pyykkonen said. That would outpace Yahoo's own forecasts for full year growth, issued on Tuesday -- which fell below average Wall Street estimates.


No comments: