KEY POINTS:
SAN FRANCISCO - Yahoo said today its quarterly profit dropped 61 per cent, weighed down by options expenses, but investors rallied around its announcement of an early debut for its internet advertising system.
Shares in the internet media company rose more than 5 per cent to US$28.40 in extended trading from its Nasdaq close at US$26.96, after its management said it was rolling out the new system for selling Web search advertising, dubbed Panama.
The comments helped overcome investor concerns over the company's conservative first-quarter and full-year forecasts.
"We have successfully transitioned the large majority of our revenue to the new search system known as Project Panama," Chief Executive Terry Semel said on a conference call with analysts. "We believe this will deliver more relevant text ads to users, which in turn should create greater volume of high-quality leads."
Yahoo will introduce its new system for ranking Web ads in the United States as of February 5, about a month earlier than expected by Wall Street analysts, and it was on track to bring it to international clients in the second quarter.
Wall Street has been waiting for signs of Panama's progress, as its introduction is a key strategy for Yahoo to compete with much-faster-growing rival Google.
- REUTERS
