Yahoo to unveil search ad system

San francisco: Internet media giant Yahoo Inc. plans to introduce its revamped Web search advertising system said the companies executives on Wednesday.

"We don't expect a financial contribution this year," said Chief Financial Officer Sue Decker at the company's annual analyst meeting in San Francisco.

"We are looking more toward 2007. It would be premature to try and put numbers around that," Decker said in response to a question on the potential financial contributions of the advertising system to Yahoo results.

"In the longer term, I expect Yahoo to grow faster than the Internet industry as a whole;" she added mentioning a target of 25 percent to 26 percent rate is to be achieved in the year 2006.

Tim Cadogan, Vice President of Yahoo's search business, said a redesigned software console used by ad buyers, along with the back-end technology would be put in the hands of advertisers by the year-end in the United States.

International advertisers will gain access to it during the beginning of 2007, she said.

Yahoo has just started to test the paid search ad system that aims to compete with market leader Google Inc. by offering advertisers an easier way to manage placing ads alongside consumers' keyword Web search results.

Microsoft Corp, previously a major customer of Yahoo's search advertising system, recently unveiled its own Web ad search system, setting up a three-way battle in the online advertising market.

Decker said Yahoo's margins have stabilized in recent years at around 40 percent, as the company balances advertising growth against the need to invest to fuel further growth.

At least half of future revenue growth will come from existing users spending greater amounts of time on its network of Internet media and e-commerce sites, rather than relying on new users, Decker said.

"More than 50 percent of our revenue growth will come from (increased) revenue per user," she said.

Drivers of this growth reflect the increasing availability of broadband Internet connections, mobile phone access to the Internet, Web search improvements and new products.

Yahoo closed down 86 cents, or 2.78 percent, to end the day at $30.11 on NASDAQ.