The web portal giant has hired Chilean scientist Dr Ricardo Baeza-Yates to head new research centres in Barcelona, Spain and Santiago, Chile as part of a hefty investment in research and development.
Paid search, which enables advertisers to pay for the top listings when users type particular keywords into a search engine, is one of the fastest growing forms of advertising.
The medium accounted £197.3m of UK ad spend in the first half of 2005, 40.2% of all internet advertising.
Baeza-Yates, who specialises in web retrieval and mining, will be based mainly in Barcelona and report directly to Dr Prabhakar Raghavan, head of Yahoo! Research.
The Barcelona office will partner with the Centre for Innovation Barcelona Media, a non-profit institution with links to Universitat Pompeu Fabra, while the Santiago office will be run in conjunction with the Centre for Web Research, which was founded by Baeza-Yates and backed by the Chilean government.
Yahoo! has always offered web search facilities on its own websites but did not own the underlying technology until the purchase of Overture in October 2003.
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