Tuesday, June 13, 2006

EBay takes Web ads to next level

Online marketplace eBay is set to unveil a keyword advertising system for eBay sellers to promote auctions on other websites, borrowing from the strategies of Google and Yahoo.

Michael van Swaaij, eBay's chief strategy officer, told a conference of software developers here Saturday of plans to allow website affiliates to run contextual ads for eBay auctions in exchange for a cut of the resulting eBay sales.

EBay's system differs from pay-per-click advertising systems offered by Google and rivals Yahoo and Microsoft by linking only to eBay auctions rather than serving as a generic advertising network.

In coming months, the program, dubbed eBay AdContext, will allow websites to embed simple snippets of code that can then automatically act to showcase items for sale on eBay's site, eBay officials said.

"We want to increase the number of times buyers come to particular sites," Swaaij said of the affiliate marketing drive, one of scores of ways eBay is now encouraging Internet developers to build eBay functions into independent websites.

What goods appear in any particular advertisement will be determined by the keywords on that Web page, a technique known as contextual advertising. A sports website would feature links to sporting gear or memorabilia from eBay, for example.

As listings change on eBay, advertising automatically changes on affiliated websites to reflect the new products or services for sale on eBay. website affiliates receive a cut of 40% to 70% of sales, depending on volumes.

"It is a way for websites to get an additional monetization stream," Swaaij said. Monetization is Internet industry jargon that refers to the potential for making more money by driving potential buyers to a website.

Such advertising, in effect, becomes another means for website owners large and small to make money to support their sites, especially blog site publishers, who often rely on small text ads from Google's keyword system to finance themselves.

EBay sees the AdContext system as complementary to, rather than competing with, the online advertising networks offered by Google and others. Many websites may offer both eBay and other advertising on their sites, spokesman Hani Durzy said.

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