Even if Panama isn't boosting Yahoo's profit much yet, early reports suggest that it's sending more viewers to advertisers' websites. Advertisers pay close attention to how often their text ads beside search results are clicked on.
"We noticed click-through-rate increases nearly across the board for our clients," said Ben Perry, director of paid search at IProspect, a search engine marketing firm in Watertown, Mass.
Some advertisers said they wanted more.
"More people are clicking through to our site," said Tyler Ransburgh, marketing manager for Go Big Networks, a website for start-up companies. But he added that the system apparently hadn't delivered the right kind of traffic, because he hasn't seen a jump in paying customers. "Ultimately, you want people to buy what you're selling."
Semel said advertisers would see better results as the new system "learns and adapts."
"Generally speaking, the results are terrific," he said in an interview. "We expect some revenue from Panama to begin to hit in the second quarter and to pick up dramatically in the following quarters. It's working like a charm."
Calls for Semel to step down have been largely silenced since the company rebounded from a disastrous 2006, when its shares lost 35% on worries that the company couldn't keep pace with Google. Yahoo shares gained 48 cents to close at $32.09, before the earnings release, a 25% gain on the year. Google's shares have gained only 3%.
Investors have also latched onto some key customer wins by Yahoo this year.
The company Tuesday renewed a deal to provide search results and ads for United Online Inc., a Woodland Hills-based Internet service provider. It won a similar deal last week to put ads on MTV.com and other Viacom Inc. websites.
On Monday, Yahoo inked an agreement to share online advertising with McClatchy Co. and four other newspaper publishers, expanding the number of papers in its stable of partners to 264 from 176.
alex.pham@latimes.com
