Internet media giant Yahoo! Inc has skipped higher on New York’s NASDAQ exchange as investors bet an early debut of its new search advertising system will help the search engine giant capture faster revenue growth in 2007.

Yahoo! said its new system for selling ads on the internet, named Panama, would be fully introduced in the US in early February, a month earlier than Wall Street analysts had predicted. Yahoo! said the move by its advertising clients to the new system was progressing faster than expected and Panama’s ability to draw more advertising spend from clients should help accelerate growth rates.

Panama is seen as an acid test of Yahoo!’s ability to gain ground on its great rival Google, even though the internet search engine leader is still forecast to grow faster in the coming year. ‘Yahoo remains a growth acceleration story,’ wrote Merrill Lynch analyst Justin Post, who rates the shares a buy, ‘and we remain positive on Panama.’

In London, fortunes of several small-caps fluctuated on AIM. SPI Lasers, the designer, developer and manufacturer of optical fibre-based lasers, zipped 1.5p higher to 238.5p on a contract win in a new market, diamond processing. Spacelabs Healthcare, the medical equipment maker, shed 14 per cent of its value on news of weak sales in the important US market and expected first-half losses.