It's sometimes easy to forget that Yahoo, through its acquisition of Overture, basically invented the paid-search market. It was in 1997, nearly two years before anyone anywhere "Googled" anything, when (what is now) Yahoo introduced the pay-per-click search auction and launched a whole industry.

Since those times, major competitors such as Google and MSN have improved their campaign management tools and ad-ranking methodologies, but Yahoo's hasn't changed much. Its system has remained the last, large simple auction, where those who bid highest ranked first.

That model is no longer effective, and Yahoo's impending changes mark the end of an era. As a result, search marketing is about to change significantly.

Yahoo is in the process of rolling out several changes, known collectively by the code name "Project Panama," which will bring many features within its system in line with market leader Google's AdWords. The most important of these enhancements has yet to launch: a wholesale change in the methodology Yahoo uses to rank its paid-search ads.

This upgrade, due in first quarter, will allow Yahoo to evolve into a quality-based auction, where a series of factors including click-through rate, ad relevancy and keyword choice will have an impact on an ad's final position. Highly relevant or useful ads that get lots of clicks may actually end up costing less to rank higher.

So what does that mean for marketers?

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