Yahoo discusses contextual advertising (2Q05 conf call quotes; YHOO, GOOG)

It's long been suspected that Yahoo (ticker: YHOO) is preparing a service to place contextually relevant ads on publishers' web sites; namely, a competitor to Google's (ticker: GOOG) AdSense For Publishers. Here are comments from Yahoo CEO Terry Semel on his Q2 conference call about search and contextual ads:

Search advertising is of course an equally exciting opportunity for us. We became a leading player in just 18 months ago and we see even more opportunity in this area around some of our larger initiatives.

We have a strong road map in place for improving technologies in order to optimize relevance and matching capabilities in our core services globally. During the balance of this year, we will introduce important upgrades in areas such as advertiser and publishing self-service platforms, which we expect will substantially improve our offerings in both content match and sponsored search.

We also plan to offer new contextual targeting capabilities which would enhance our services both on Yahoo! and for small publishers throughout the Web. These initiatives are among the highest priorities within the Company and important investment in Yahoo!'s long-term growth.

(Quotes are from the CCBN StreetEvents transcript.)

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