Yahoo plans to launch advertising technology later this year designed to boost the relevance of ads shown to users, the company said at a meeting with financial analysts in San Francisco.

The programme will allow for better geographic targeting, which Yahoo hopes will capitalise on the emergence of localised search queries.

More relevant advertisements are expected to result in higher response rates from visitors, driving increased click-through rates and more revenues for Yahoo, the firm predicted.

Yahoo offers a pay-per-click advertising programme through its Yahoo Search Marketing Solutions programme, formerly known as Overture.

The unveiling follows several weeks after Microsoft unfolded plans for its new AdCenter initiative.  

The software giant claims that its programme will allow advertisers to better target visitors to its Live software and MSN offerings by targeting audiences from specific geographic locations at predetermined times of day.

Google is seen as the leader in pay-per-click advertising programmes with its AdWords product. 

The search firm wrapped up a 18-month optimisation project earlier this year to capitalise on its advertising technology, and has attributed a large portion of its recent revenue growth to the project.