Wednesday, October 19, 2005

Wed - Yahoo improves search/advertising technology to catch Google

Terry Semel, Yahoo's chairman and chief executive, said there would be “real upside for Yahoo in the near future” from moves they're making which are intended to close a performance gap with the faster-growing Google.

At present, about 11 per cent of the searches on Yahoo result in “clicks” that produce fees from advertisers, compared to the 20 per cent achieved by Google.

Yahoo is updating its search algorithms in an effort to increase the relevance of its results and boost the click-through rate from users. Other initiatives include improving the matching capabilities of the company’s technology so that it can sell ads linked to more search terms, and launching a new “publishers network” to place ads on other websites.

In the last quarter Yahoo saw a 42% gain in revenues, excluding traffic acquisition costs paid to other websites. At $932m, revenues were $14m ahead of expectations.

It's interesting how Google continues to set the pace for Yahoo. If I were a Yahoo investor I would be happy with this. There is nothing like a bit of competition to focus people's minds and energies. And lets face it Yahoo is responding pretty well.

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