Yahoo's Panama out of the gate strong, but ...

ComScore is out with a report that shows Yahoo's Panama search advertising system is off to a swell start. How swell? In the two weeks since Panama's launch click through rates were up 5 percent and 9 percent.

For Yahoo, Panama's early success is good news (Techmeme discussion). But...

The comScore sample may be skewed by Valentine's Day and President's Day. Two holidays that may have had folks searching for gifts. Gift hunters may have inflated the migration to sponsored clicks over general search results.

Expectations for Panama's impact are much higher. Bank of America analyst Brian Pitz said in a research note that he expects click through rates to grow about 15 percent to 25 percent starting in the second half of the year. Monetization should improve 32 percent to 44 percent. In other words, Panama has a nice start, but the game is just beginning. Yahoo officials have said that Panama's impact will improve as time goes on.

Early returns from the comScore study don't break out mobile results. Pitz said that mobile sponsored search is built into the Panama system.

Pitz said:

We believe that relevance is even more important in mobile search than it is in PC-based search, due to the smaller screen (fewer results able to be displayed) and the relative fickleness of Mobile Internet users. That said, we think  that the newly improved Panama system could also  provide  upside,  as  the  company continues to gain traction on the Mobile Internet. We also note that the Mobile Internet may be the best way for Yahoo! to penetrate the European market, where it historically lags competitors.

Yahoo's goal has to be parity with Google or better. Wall Street analysts are holding out hope that Yahoo's Panama system will close the gap with Google. But as VC Fred Wilson notes: "Google's click rates are significantly higher than Yahoo's so a 9% gain is not going to get them parity with Google."