• by Shankar Gupta , February 27, 2007

Yahoo's search ads have seen a recent rise in click-through rates, since the launch of Panama, an upgrade to its search marketing product which, among other features, includes the ranking of ads by relevance, according to data released Monday by comScore Networks.

A week after Panama launched on Feb. 5, sponsored search ads on Yahoo saw a 5% increase in click-through rate over the week ending on Feb. 4. The week ending Feb. 18 saw click-through rates up 9% from the rates the week before Panama's launch.

The percentage of clicks made on sponsored links also increased modestly. During the week before Panama's release, 10.1% of clicks on Yahoo's search engine were on sponsored listings. Seven days later, the percentage rose to 10.6%, and another week saw a rise to 11.1%. The numbers were based on comScore's sample of 1 million U.S. Internet users.

Last week, research firm UBS released a report predicting that Yahoo's search revenue could grow 45% on the strength of the Panama update, assuming that the rate of search volume continued to grow, and that the engine's click-through rate on sponsored links increased at least 8%. The note predicted that the revenue gains would not be seen until well into the second quarter.