Yahoo "Project Panama" Testing New Ad Ranking System

Last August, we covered how Yahoo planned to launch a new paid listings model more like Google AdWords, where clickthrough and other factors might impact ad rankings. Now via Marketing Pilgrim, there's a Forbes report that Yahoo has been testing the new system out in the wild -- well, Scandinavia.

Currently, Yahoo places a paid ad solely based on the amount you are willing to pay for the keyword. Google uses both price of the keyword and a "quality score" to rank the ad.

Yahoo has named this test project "Project Panama," where ads placement are now based on price and relevancy of ad. Yahoo is expected to test this in the UK in July.

Postscript: Posted a new update under the title Yahoo Denies Scandinavia Testing.