Sunnyvale, Calif. – Yahoo Inc., owner of the most visited U.S. website, is upgrading its software so that advertisers’ costs depend on the type of users their ads attract.
The change, announced in an e-mail late Monday, is the latest addition to Project Panama, an advertising system that Yahoo unveiled in February to recapture market share lost to Google Inc. The improvements will be rolled out in phases over the coming months, the company said.
The plan, called quality-based pricing, charges more to companies advertising on websites that are likely to draw the most valuable traffic. Yahoo gauges the quality of traffic by measuring the number of people who click on ads and their likelihood of placing an order.
“Quality-based pricing will help ensure that traffic from Yahoo’s network is priced in a manner that is consistent with the quality it delivers to advertisers,” the company said.
Yahoo handled 22 percent of U.S. Web-search queries in April, compared with 55 percent for Mountain View, Calif.-based Google. Microsoft Corp., located in Redmond, Wash., had 9 percent.
In April, Yahoo reported first-quarter net sales of $1.18 billion, missing analysts’ estimates and sending the stock down 12 percent.
Shares of Yahoo fell 36 cents to $28.23 Tuesday in Nasdaq Stock Market trading.
Google rose $11.77 to $518.84, while Microsoft dropped 14 cents to $30.58.
