Yahoo, Viacom strike search deal

Still at battle with Google, entertainment conglomerate picks Net company's Panama ad platform to serve up search-related ads.

Yahoo on Tuesday announced a major customer for its new Panama search-advertising platform: Viacom.

Under a multiyear partnership, Yahoo will serve as the exclusive provider of sponsored search and contextual ads to Viacom's 33 entertainment sites, which include those of MTV Networks' VH1 and Comedy Central.

The deal could be expanded to more than 140 additional Viacom Web sites worldwide. Terms of the agreement were not disclosed.

Panama, launched in final form earlier this year, ranks ads in search results based on how they perform, or how often they get clicked on, and not merely on how much the advertiser is willing to pay. Yahoo has been unable to monetize its search advertising as successfully as Google has, and Panama is key to Yahoo's effort to close the gap with its younger rival.

Early results indicate that the effort behind Panama is paying off. Yahoo Chief Executive Terry Semel said at a conference sponsored by Ad Age last month that the company would reveal "some very exciting numbers" related to Panama when the company announces its first-quarter results in mid-April. Executives have said any significant financial impact from the new search ad system on the company's results will not be seen until later in the year.

"Yahoo has made impressive strides with its new search-marketing system," Viacom Chief Executive Philippe Dauman said in a statement. "As a global leader in content for every screen and platform, we couldn't be more pleased to have them as a partner, and we look forward to growing our relationship even more over time."

Viacom and Yahoo's chief rival, Google, meanwhile, are battling in the courts over alleged copyright violations on Google's YouTube video-sharing site.

Last month, Viacom filed a $1 billion copyright infringement lawsuit against Google, which acquired video-sharing site YouTube last October for $1.65 billion in stock, alleging that pirated versions of its popular programming are posted to YouTube daily.

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