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Yahoo's Own Ad Platform

Yahoo today said it plans to roll out a redesigned search advertising platform, which spokeswoman Gaude Paez said will help Yahoo compete with rivals Microsoft and Google.

The platform is the transaction point between Yahoo and its advertisers who buy space next to search results. Yahoo said the new simplified platform will mean advertisements will hit the Web faster than ever before.

The company will also help advertisers by rotating multiple versions of ads and, over time, adjusting the rotation times so that the ones generating the most clicks go up more frequently.

Yahoo promised the new service will automatically help users find the least expensive way to maximize their "Return on Ad Spend" and "Cost Per Acquisition."

The platform will also track the full value and contribution of every ad campaign by allowing advertisers to see beyond the last click that led to a conversion.

Analysts say the new platform will help Yahoo leverage its millions of registered users by helping advertisers target specific audiences.

That's the idea, Paez told internetnews.com.

For example, she pointed to Whereonearth, technology Yahoo acquired last October, which will be included in the new platform.

Paez said Whereonearth understands colloquial descriptions of geographic locations, such as "restaurants near Fenway," thus helping marketers target specific local audiences.

"We decided to move forward with enhancing our geo-targeting capabilities," Paez said, "because that's what we heard from advertisers was on the top of their list."

And that's why the new platform is a good move for Yahoo, Forrester Analyst Shar Vanboskirk told internetnews.com.

She said that by helping marketers target specific audiences, Yahoo can close its Google gap.

Google dominates in terms of revenue dollars and the sheer number of consumer searches, Vanboskirk said.

"But Google is a little bit behind in terms of its consumer data stores. Yahoo has a lot of information about its users because a consumer on Yahoo uses a myriad of different properties. They store all of that information to get a really deep profile."

Yahoo's announcement comes a week after MSN announced adCenter, a competing advertising platform for its own search engine.

Like Yahoo, MSN trumpeted the demographic-targeting capabilities of its new platform.

Previously, Microsoft depended on Yahoo's Search Marketing for its advertising revenue.

But Paez said the timing of the announcement was meant to coincide with the release of application program interfaces (API), which are building blocks of code for third-party developers.

Though the platform will not be online till the third quarter of this year, Yahoo "needed to give the ecosystem adequate time," Paez said.

Two partners introducing competing products in consecutive weeks isn't so strange in an Internet ad industry that grew by 30 percent last year.