Yahoo! Runs in Place

Updated from 12:26 p.m. EDT

It was hard not to think of the Van Halen oldie Panama during Yahoo!'s third-quarter conference call Tuesday. Only it wasn't a fit David Lee Roth belting out the words. And it certainly wasn't Sammy "I Can't Drive 55" Hagar.

Instead it was Yahoo! CEO Terry Semel, for whom 55 has been a bit of a challenge this year, given the number of speed bumps his Internet company has been hitting.

In fact, Panama is emblematic of the slow, painful turnaround for Yahoo! to reinvigorate itself into an Internet leader whose ad revenues are again growing faster than the industry at large.

To his credit, Semel was frank about Yahoo!'s disappointing performance and vowed to fix things. "We are not exploiting our considerable strengths as well as we should be," he told analysts. "Near-term, we are expecting our growth to be in line with the overall market. ... That is not where we should be."

Panama, the new search technology that would in essence Google-ize Yahoo's search engine, is supposed to help change that.

Yahoo!'s searches had long relied on Overture technology, which ranks search results according to the amount advertisers pay for keywords. Google's (GOOG) search algorithms had also done this, but they also ranked results according to relevance. Panama was Yahoo!'s way of catching up, in a broad sense, with Google.