Panama (ad system)

Panama is an online advertising platform created by Yahoo!.

Panama was launched by Yahoo! on 5 February 2007.[1] The Panama team was assembled in mid-2005.[2] The advertising platform was Yahoo’s effort to close the wide gap with Google in the race for search advertising dollars, a fast-growing business then dominated by Google. Customers with accounts already on Yahoo! were transferred to the new system over the following few months.


Yahoo! inherited the search advertising business when it purchased Overture (previously named Until Panama, Yahoo! search continued to operate the original simplistic algorithm which ranked text ads according to how much advertisers bid for the keyword searched by the user. Meanwhile, Google operates under a more sophisticated model, which ranks paid ads on the basis of bid price as well as prior click-through rates. This improvement generally produces higher click through rates (hence higher revenues) for the search engine.

For example, an ambulance-chasing attorney bidding for the keywords "back pain" would likely get a lower clickthrough rate than the keyword "physiotherapist", regardless of what the two parties bid per click. An algorithm that eventually de-prioritises the attorney's ad is better for the search engine (in terms of revenue produced) and the user (more relevant ads).

Key players in the Panama project were Brian Acton, David Henke & Qi Lu.


The platform provides advertisers with a digital dashboard where they can manage their marketing campaigns, aim ads geographically, and test their effectiveness. It includes interactive tools that suggest to advertisers what to bid based on their budget and the number of users they want to attract.[3]

Quality index

The quality index, as called by Yahoo! engineers, gives advertisers a sense of how the system will rank an ad, and sophisticated analytical tools that give advertisers insights on why certain campaigns are effective.


  1. Elesseily, Mona (2007-02-05). "New Panama Ranking System For Yahoo Ads Launches Today". Search Engine Land. Retrieved 2015-01-18.
  2. Helft, Miguel (2007-02-05). "A Long-Delayed Ad System Has Yahoo Crossing Its Fingers". The New York Times. Retrieved 2010-05-21.
  3. Helft, Miguel (2007-02-05). "A Long-Delayed Ad System Has Yahoo Crossing Its Fingers". The New York Times. Retrieved 2010-05-21.
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