Yahoo is set to unveil today the long-awaited revamp of its online advertising platform (codenamed Project Panama), which the company hopes will close the gap between it and Google and extend its lead over Microsoft, reports the Financial Times. The changes will take affect "shortly after" Yahoo finishes - in the third quarter - the overhaul of the current user interface and management tools that advertisers use to bid for, and manage, keywords. Those changes will be introduced to advertisers and tech partners now to give them time to prepare.

Yahoo will be change the way it prioritizes the online ads that are displayed in search results; a new ranking formula will take into account not just the amount bid but also, like Google, the click-through rate of the ad as well as other, hush-hush factors, according to Tim Cadogan, vice-president of search at Yahoo.

Initially, according to Yahoo, the main difference from Google will be that Yahoo will provide information about how an ad will likely be displayed, writes the New York Times. As advertisers enter a bid, they will see an estimate of how many clicks they will receive each day - and a graph will show how many more clicks they can expect for each increased bid.

(Search Engine Journal's Loren Baker publishes an email from Yahoo Search Marketing to advertisers, listing the new features being offered.)

Though immediately intended for contextual search ads coupled with geo-targeting, Yahoo's new platform has been designed to subsequently be able to use of demographic and behavioral targeting - and to handle interactive ads that reach consumers via various devices.

Both Yahoo and Microsoft, which officially launched its renamed Microsoft adCenter platform last week, say they plan to take search engine marketing to the next level - to cell phones, TV, and videogame consoles.