Yahoo introduces PayPal

Yahoo Inc. has expanded its recently upgraded Web search advertising system overseas and added an online payments service as part of its partnership with eBay, Chairman Terry Semel said on Tuesday.

Speaking to investors on a conference call following first-quarter results, Semel said Yahoo had offered its recently upgraded Panama Web search advertising system to key Japanese customers, expanding on the initial U.S. debut of Panama in February.

He said fuller international expansion of Panama would occur over the next several months, including European and South Korean markets by the end of the current quarter.

"While we're still in the early days, we've already seen significant increases in the relevance of our most prominent sponsor search ads and have heard from our advertisers that they are seeing meaningful improvements in ad performance," Semel said.

He said Yahoo also expanded the U.S.-focused partnership it struck with online auction leader eBay Inc. nearly a year ago by offering a "PayPal checkout program" -- taking aim at rival Google Inc.'s Google Checkout.

The PayPal checkout program is aimed providing merchants and advertisers a streamlined transaction checkout process and improved conversion of window shoppers into buyers among active Yahoo shoppers, Semel added.