Amazon to feature Google search and ad links

SEATTLE/PALO ALTO: Google Inc. said it would provide its popular web search technology and advertising services to Internet retailer Amazon.com Inc., allowing Amazon to offer a wider range of products and services to its customers.

When customers run searches on Amazon's shopping site, the retailer will display ads that look like Web search results organized under a heading such as "sponsored links." The sponsored links, which use Google search technology, are already active on some parts of Amazon and will be expanded over the next few months, the Web retailer said.

Google's search functions won't replace Amazon's own internal search engine but rather complement it, Amazon said. For example, a user searching for music CDs will see links to concert ticketing agencies within their search results, a service that Amazon currently doesn't offer.

When a customer clicks on the sponsored listing advertisement it generates revenue for Amazon and Google. In addition, Amazon said that it will work with Google to develop a Web search that will "offer customers the best information to discover anything they want to buy online," an Amazon spokeswoman said.

Amazon said it hasn't made a final decision on how the second Web search feature, which will also debut over the next few months, would work. "We're going to try a lot of different things," said Owen Van Natta, vice president of Worldwide Business Development.

SEARCH BATTLE ROYAL?

The announcement between Amazon and Google is the latest to jolt the paid-listing industry this week, after talk of No. 1 software maker Microsoft Corp.'s interest in the Web-search market sent shares in Overture Services Inc. to year-lows. Overture, a leading provider of ads linked to Web search results, allows advertisers to bid to place their promotions at or near the top of a screen displaying search results.

Revenue from such advertising, also referred to as paid-search or paid-listing, has seen explosive growth in the last couple years as expense-conscious companies have zeroed in on more targeted advertising. The entry of deep-pocketed Microsoft into the Web search and paid-listing arena, as Amazon and Google forge closer ties, would mean greater competition for setting the standard for paid-listing services and technology.

Shares of Pasadena, California-based Overture slumped further on Thursday, closing 5.8 percent lower at $12.71. Shares of Seattle-based Amazon closed up 27 cents, or 1 percent, at $26.65 in Nasdaq composite trading on Thursday. Google is a privately held company headquartered in Mountain View, California.

Top web portal Yahoo Inc. also stepped into the web-search space with its purchase last month of search technology company Inktomi Corp. Amazon and Google did not disclose financial details or outline any revenue-sharing agreements.

© Reuters