It may sound crazy after 13 years, but Yahoo could get out of the search business altogether. A New York Times piece suggested that the company might outsource its search to Google and redirect the money spent on search to “reinvigorating the Yahoo portal, buying hot start-ups and taking other initiatives that would differentiate Yahoo from the Internet search leader.”
Yahoo might actually make more money that way. Google’s search advertising technology is still far more efficient than Yahoo’s. And Yahoo’s attempt to catch up with Project Panama was very costly. Though the overhauled search advertising system is better than what Yahoo had in place before, it still might not be enough.
But does it really make sense to give up on search at this point? Marketers like being able to purchase all kinds of online ads from a single source – and there are areas of online advertising in which Yahoo still beats Google. The advertising plan going forward is one of Semel’s better legacies: the company plans to sell search and display ads on the Yahoo portal and on a growing family of web site partners such as eBay and Comcast, while also brokering ads through RightMedia. Another excellent Semel legacy is Yahoo’s strong advertising sales staff.
As for Panama, that investment has already been made; it would be crazy to abandon it now, without giving it more time to prove itself. John Battelle on his SearchBlog shared part of a report he received from a leading SEO/SEM firm evaluating Panama. It noted that Panama imitated Google in many areas, and that this was a good thing because it “creates operational standards for the search marketing industry.” After talking some about Panama’s pluses and minuses, the report went on to say that “Panama is brand new. Like any enterprise-level software product, it needs time to find its footing and refine its offering. We are confident that, with time, Yahoo’s new system will represent a very positive change for paid search advertisers.” At the very least, you can expect to see Yahoo hang in there for another couple of quarters to see what kind of return they’ll get on their Panama investment.
Search Engine News 
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