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Yahoo! Inc. has started to upgrade its formula for obtaining advertising dollars from online search requests. To date, the effort has been more effective at raising morale than money for the company, according to its two top executives. Susan Decker, Yahoo!'s chief financial officer, said the new advertising system, known as Panama, is not likely to raise the firm's first-quarter revenue, despite the fact that the improvements have been well-received. The changes were implemented on February 5, 2007. Terry Semel, chief executive officer of Yahoo!, noted that Panama has 'reinvigorated' the company, which had experienced a 35-percent decrease in its stock price and a major management shake-up in 2006. According to Semel, the introduction of Panama has changed the mood for the better at Yahoo!. Investors have already indicated that Panama will ultimately lead to profits for Yahoo! and help it recover from the losses of 2006. Yahoo!'s stock price gained over 20 percent thus far in 2007. The impact of Panama on the company's bottom line will probably not be felt until the second half of 2007, according to Decker. The improvements in advertising are designed to allow Yahoo! to improve is ability to analyze search requests and determine the kinds of advertising links most likely to be accessed by users. Each click on an ad generates revenue for Yahoo!.
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