Earlier today Yahoo launched it’s new search marketing system, “Project Panama”. In contrast to Google who mixes advertiser bids and ad relevancy to determine ad placement, Yahoo strictly relied upon advertiser bidding as to how high an ad was placed in search results. This is only one change coming from the new Panama. Additionally, Yahoo is introducing a new interface, making it easier for advertisers to place ads.

Is this going to help Yahoo significantly? While I think more advertisers will be likely to try out the new Panama, it isn’t going to have much of any impact on the volume of users searching via Yahoo. I know from a first hand experience how difficult it used to be to place ads on Yahoo. You would have to literally talk to someone on the phone prior to your ad being approved. Additionally, to make minor changes to your ad campaign, you had to often times get on the phone with an advertising representative. Overall, I think the system will increase Yahoo’s ability to monetize their traffic in addition to increasing their overall advertising volume (if the system is as great as Yahoo claims it to be). On the other hand, not much will change in terms of absolute visitors to the site. While this is a huge step in Yahoo’s quest to turn around the company, it is only a first step in the long quest to success.