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Yahoo 2007: Is Panama Enough?

Panama may not be enough to clean up Yahoo's mess. In the face of a slumping year on the stock market, deserting executives and a trouncing by Google in Web search and mergers and acquisitions, Yahoo needs a good 2007.

The company has placed high hopes on Panama, its new ad monetization technology aimed at delivering better-targeted ads to its users in the hope that it will make Yahoo's search and display ads more lucrative.

Panama may be exactly the thing Yahoo needs to make money from its massive worldwide user base, but better monetization may not be enough to convince investors--especially if user growth continues its slow decline to a standstill. Yahoo's traffic is old, its users are old, too, and it needs a fresh infusion of youth to make it look like the future looks bright.

For example, the Web giant has failed miserably on the ultra-hot social-networking front, wasting billions on social networks the company failed to integrate properly and then standing idly by while News Corp. and Google scooped up the Web's best prospects. Indeed, Facebook, the social network for students, is still around, but negotiations collapsed after a long tussle over valuations.

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