Sunnyvale, Calif. - Shares of Yahoo rose more than 7% on Wednesday after the Internet giant announced plans to launch new ad search technology that the company hopes will help it close its revenue gap with rival Google.

The new system, code named Panama, will debut on Feb. 5. It will rank all of Yahoo's search marketing ads in the U.S. by quality, in addition to keyword bid price.

To date, search ads on Yahoo and its distribution partner sites have been ranked solely by bid price -- the higher the bid, the higher an ad appears within the search results.

When the new ranking model goes into effect, both bid and the ad's quality -- determined by its historical performance -- will determine where an ad appears in the search results.

"By encouraging advertisers to focus on the quality of their ads, we can deliver a better search experience for all of our customers," said Tim Cadogan, Yahoo's vice president of search marketing.

Yahoo expects to generate more revenue per Internet search as a result of the system.

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