Yahoo today unveiled a new advertising product, called SmartAds, that automates the creation of banner ads allowing advertisers and agencies to run potentially thousands of permutations tailored in real-time to the web surfer's age, gender, location and online activities.

Someone searching for flights between Dallas and Phoenix could be served an ad, for example, with specific up-to-the-minute fares from a particular airline along with a button that says "buy now", all within the ad, said Yahoo spokeswoman Gaude Paez.

"We do behavioral targeting now," she said. "This makes display [advertising] more of a direct response vehicle than just branding."

SmartAds will get different backgrounds, logos, and other features based on who is seeing the ad and what they are interested in. This marks Yahoo’s latest effort to catch up with Google in search advertising, while going through some changes in the executive offices, including the departure of its chief executive, Terry S. Semel, and Wenda Harris Millard, the company’s longtime chief sales officer.

SmartAds is currently being tested across the Yahoo! network, as well as on affiliated sites in its ad network, including two of the three major airline companies as well as some travel aggregators. Once Yahoo's purchase of online ad provider Right Media is completed, SmartAds will be displayed on Right Media's advertising network as well.