Huge news last night was that Yahoo announced that they will be launching their new ranking algorithm for their sponsored search ads on February 5th. The new ranking model is a huge change from the old model, which was based on a pure auction bidding environment. Now advertisers are going to have to worry about price plus factors such as their ads click through rate.

Advertisers have been slowly migrating over to the new ad system starting mid-October 2006. This was done so that advertiser can become accustomed to the new interface and also track their quality score. The quality score piece comes into play in less than two weeks, on February 5th. There is already a ton of great posts on what this means to advertisers, so I figure I will link to them directly below.

- Yahoo Search Marketing’s New Quality Ranking : Patent Info & How To’s by Loren Baker - Search advertising changes should benefit publishers by YPN Blog - Ready Or Not, Here Comes Panama: New Yahoo Sponsored Listings Ranking Model Coming Feb. 5th

Those are some of the many posts out there discussing what this means.

I know there are mixed reviews on the Panama release, but this is the way it is and I honestly believe this is a positive change. So use this to your advantage!

Related Topics: Yahoo: Search Ads

About The Author: Barry Schwartz is Search Engine Land's News Editor and owns RustyBrick, a NY based web consulting firm. He also runs Search Engine Roundtable, a popular search blog on very advanced SEM topics. Barry's personal blog is named Cartoon Barry and he can be followed on Twitter here. For more background information on Barry, see his full bio over here. See more articles by Barry Schwartz