Two weekends ago, a systems upgrade left some of Yahoo!'s paid search customers unable to manage their campaigns for most of last week. Ted Meisel, president of Yahoo! Search Marketing, sent an e-mail to paid search clients Sunday informing them that the problem was caused by an upgrade to the core database, and had been mostly fixed.

"At this time, we have resolved the majority of the issues, and core service has been restored. We are hopeful that any additional service interruptions will be minor as we continue to fine-tune our systems," he stated in the letter.

Yahoo! also plans to address on a case-by-case basis compensation for advertisers who wanted to change their bids but were unable to manage their accounts, said a company spokeswoman.

While Yahoo! blamed its problems on the technical upgrade, some search marketers said that last week wasn't the first time they've had trouble with the company. Charles Sardou, senior media director at icrossing, said his firm has noticed sporadic problems--including difficulty in logging into the system and reports running slowly--for at least the last several weeks.

Sardou added that although the worst of the problem only lasted for a few days, the incident could have a lasting effect on marketers' perception of Yahoo! "With Microsoft coming online, this is not the best timing," Sardou said, referring to the Redwood, Wash. company's upcoming launch of its own paid search program.

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