Google, Overture eye content-based advtg

SAN FRANCISCO: Google Inc., Overture Services Inc. and other Internet advertising providers are racing to sign partners for new services that link commercial messages



to content on Web pages, a still largely untested market that backers see poised for explosive growth.

Google and Overture are already the top providers of paid-search services that respond to key-word Web searches with text ads that appear under headings like "sponsored links."

The new services promise to put relevant ads in prominent places on Web pages. For example, a story about pop princess Britney Spears might be accompanied by links to Web sites that sell concert tickets or CDs.

Together, Google and Overture already have locked up search partnerships with operators of the Web's most trafficked sites, including AOL, Yahoo and MSN, while building rosters of advertisers numbering around 100,000.

"In the last quarter, all the excitement around search-engine marketing spilled over into contextual search," said Jupiter research analyst Gary Stein.

Google rolled out its contextual service in March. Its partners include newspaper publisher Knight Ridder Inc., HowStuffWorks.com and a handful of smaller Web sites.

Late last month, Overture stepped into the market with partners such as MSN, Microsoft Corp.'s Internet service, and the MyFamily network of genealogy sites. Web search services partner Yahoo is also testing its contextual products, a spokesman said.

Also in the mix is Sprinks, a division of magazine publisher Primedia Inc., which counts CNET Networks Inc. and business and financial information provider Forbes as partners.

This week Sprinks said it signed an exclusive content-targeting deal with MSNBC.com, a cable television and Internet news provider that is a joint venture of Microsoft and the NBC unit of General Electric Co.

FOLLOW THE MONEY

Pasadena, California-based Overture estimates that the market for contextual advertising could grow to $2 billion annually by 2008 -- or about the size of paid-search today.

U.S. Bancorp Piper Jaffray analyst Safa Rashtchy said it was too early to tell whether the market for content-based services -- which he estimates at "barely a $100 million" now -- will grow to rival paid search.

Rashtchy and others said click-through rates -- or the rate at which Internet users click on ads -- are lower since readers on content sites may not necessarily be in a buying mood.

"When people are searching, they're in search mode, as opposed to browse or surf mode, when they have no particular goal in mind," said Danny Sullivan, editor of SearchEngineWatch.com.

Under the content programs, advertisers bid to use certain key words and pay each time Internet users click on their ads. Services providers like Overture and Google split that money with content providers.

Ever-growing eBay Inc. has gotten into the game with help from DoubleClick Inc. and Conducive Corp. Its program, which used graphical ads and runs only on its site, aims to connect sellers and potential buyers while helping to boost eBay's lackluster ad revenues.

© Reuters