Yahoo has been under pressure from investors to make more money from the ads it places next to its search results, and Yahoo executives have contended that the Panama platform is the answer.

Now that the ad technology has been delayed, Yahoo is likely to lag Google in terms of search profitability until next year at least. "Google still has the upper hand, in terms of monetizing search," said Martin Pyykkonen, an analyst with Global Crown Capital, who has overweight ratings on both Google and Yahoo.

Yahoo is working on a system that would better match search results with advertisements or what we know as contextual advertising. They're also have plans to factor demographic data to server better ads.

According to Chief Executive Terry Semel, it is expected to debut by 4th quarter this year. This news together with disappointing second-quarter sales resulted in a drop in Yahoo Inc's shares.