As predicted, Yahoo says its new Panama advertising system is creating some "exciting numbers".  According to the New York Times, Yahoo CEO Terry Semel says his company's success since launching Panama had turned him into an "all smiles" guy:

Semel, speaking at a media conference sponsored by Ad Age, said the new system, known as Project Panama, would show "some very exciting numbers" when Yahoo releases its first quarter earnings report.

"I'm totally all smiles," Semel said. "We are very excited and very happy and I'm smiling broadly."

With practically no where to go but up, I can't say I'm surprised to hear that Panama is working well for Yahoo.  I'm glad to hear it… don't get me wrong.  But I'm just not all that surprised.

Matt has been predicting for a while that Panama would have enough of an impact on Yahoo's bottom line that folks will soon start talking about "the return of Yahoo".  But that impact, he says, is only temporary.

I think he's right, to a degree.  But I think part of "the Panama effect" will carry over into a permanent boost for Yahoo.  Is it going to regain it's lost luster?  That's a little more iffy.  I think Yahoo has a shot to close some of the gap between Google.  Instead of being a distant number two, Yahoo could become a closer number two.  But short of a major catastrophe in Mountain View, I don't see Yahoo beating Google at search.  Not anymore.  Not because of an inferior product, either.  The dynamics of the Google-Yahoo competition have just changed too much.

What do you think?  Is "the Panama effect" a long-term boon for Yahoo?  Or a temporary buoyancy spurred by the newness of Panama?