Advertisers are praising Yahoo's new Panama ad system, and that helped send shares of the internet company's stock up almost 2 percent on Tuesday.

Bear Stearns analyst Robert Peck, citing reviews from advertisers attending a search engine conference this week, said Yahoo's Panama ad system, which launched in the fall, is so far operating smoothly, Red Herring reports. "Several comparisons were made to Google AdWords and MSN adCenter, and Panama appeared to compare favorably with both online ad platforms," Peck wrote.

"Ease of use, a robust interface to target ads by state and locality, and removal of several legacy quirks were cited as positive improvements," he added.

Yahoo's online ad revenue was an estimated $2 billion from paid search last year, compared with Google's $6 billion, prompting Yahoo to overhaul its ad system to be more competitive. Yahoo has stated that it doesn’t expect Panama revenues to impact financials until the end of the first quarter of 2007.