eBay is entering the keyword advertising business with a twist: the company will promote its auctions on other Web sites, borrowing a strategy from Google and Yahoo, but making it its own. The
auctioneer's chief strategy officer told a conference of software developers in Las Vegas on Saturday that it will run the auction-equivalent of contextual ads on other Web sites in exchange for a cut
of the resulting sales. Basically, eBay will display its auctions on content partners' Web sites; merchants will provide snippets of code that allow content providers to showcase items for sale in
real-time at eBay's Web site. The new program, called AdContext, will be unveiled next week. The goods displayed on a page will be determined by the keywords on that Web page. Depending on volume,
affiliates receive a cut of 35 to 60 percent of sales. AdContext certainly sounds like a great idea; one wonders where this kind of innovation has been for eBay in the last few years. But will
advertisers buy into this? It all depends on what kind of publisher network eBay can pull together. eBay--of course--says AdContext will not compete with Google and Yahoo's contextual programs, but
niche publishers could favor eBay's system if the cuts they receive are that much more substantial than those from Google and Yahoo. However, a publisher could conceivably use both programs.
Read the whole story at Reuters.com »
