Strategy verdict - Panama

face of stiff competition from Google and increasingly MSN.

The early signs are promising, with the system cherry-picking features
from Google and MSN. There is a raft of new and improved features such
as additional targeting capabilities, a new bidding environment, an
improved user interface and increased relevancy of search results via a
similar system to Google's quality score.

Time will tell if this is a cosmetic makeover or a sea change in search,
but the need for Panama to be the ace in the pack cannot be overstated.
Yahoo! has fallen well behind Google and has even seen MSN eating away
at its market share. One of the main contributory factors to this slide
has been down to MSN and Google's superior platforms.

Yahoo! has only clung onto larger clients and agencies by retaining
agency commission and by offering the only realistic alternative to
Google in terms of search volumes.

Yahoo! will expect now to increase ad revenue and market share after
this launch and the impact in the market will be closely monitored by
all parties.

Perhaps the most interested will be MSN, which is rumoured to be
considering an offer for Yahoo! once the market reaction to Panama is
clear, further muddying the search waters.

Diffiniti welcomes Panama's arrival as it gives the search market some
much needed competition.

Coupled with the recent arrival of Vista, which promises to dramatically
increase MSN's search volumes in the next 18 months, the search market
looks less sewn up now than at any point in the past two years. Watch
this space.

- Review by Nick Ellsom, Director of search, Diffiniti

4 OUT OF 5.