Yahoo Inc's new online search advertising system has increased the number of people who click on links that pay the Web media company money, a research firm said on February 26.
Data collected by Internet usage measuring firm comScore Networks showed that the number of Yahoo search users who clicked on ads - known as the click-through rate - rose five percent in the first week after the new system's debut and nine percent in the second week.
Clicks on sponsored links as a proportion of total clicks rose to 11.1 percent two weeks after launch, compared with 10.1 percent the week before launch, comScore said.
Yahoo's new ad system, known as Project Panama, was launched on February 5, and is a key piece of its strategy to compete with faster-growing rival Google Inc.
Web search advertising makes money for a company like Yahoo by placing ads in a user's search results. Each time a user clicks on one of the sponsored links, Yahoo collects a small fee, so improving the relevancy or increasing the number of ads can help boost revenue.
"They have definitely narrowed the gap" with Google, comScore Vice President James Lamberti said. "Just a small change like that in hundreds of millions of clicks is going to be a huge opportunity to make Yahoo money."
Lamberti said the true benefit would not be known until it was clear how much advertisers were paying Yahoo per click. "When you've got more clicks, half the equation is satisfied in terms of making more money."
Yahoo said existing search ad customers would be converted to the new system by the end of the first quarter, leading to revenue improvements from the second quarter forward.
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