Sector Snap: Internet Search
Monday February 26, 1:31 pm ET
Yahoo Shares Climb on Positive Reports on Project Panama, Google Slips
NEW YORK (AP) -- Shares of Internet search providers were trading mixed Monday, with Yahoo Inc. up slightly following positive early reports of its new search advertising system, known as Project Panama.
ComScore Networks, in a sampling of 1 million U.S. Internet users, found that Yahoo saw a "noticeable lift in its sponsored click-through rate" in the two weeks after the launch of the new system.
Click-through rate refers to the number of total clicks on sponsored search ads, divided by total searches. Yahoo saw a 5 percent increase in its click-through rates in the week ending Feb. 11, and a 9 percent jump in the week ending Feb. 18, according to comScore.
Panama is an upgrade to Yahoo's search engine, designed to boost ad sales. It matches advertisements to search queries, helping the company earn more money by charging each time a user clicks an ad.
"We continue to believe that Panama amounts to the biggest single catalyst in the Net sector -- as search accounts for approximately 50 percent of Yahoo's net revenue and 60 percent of its profits," wrote Citigroup analyst Mark S. Mahaney in a note to investors, reiterating a "Buy" rating on Yahoo. Overall search marketing trends, he noted, "appear very healthy."
Shares of the Sunnyvale, Calif., company rose 16 cents to $31.94 in afternoon trading on the Nasdaq Stock Market. The stock is up nearly 27 percent since the beginning of the year.
Search leader Google Inc., meanwhile saw its shares fall $6.07 to $464.55 on the Nasdaq.
Shares of Microsoft Corp., which offers search on its MSN and Live sites, were up 2 cents at $28.92 on the Nasdaq.
Shares of Chinese search provider Baidu.com Inc. declined 22 cents to $110.19 on the Nasdaq.