• by Mark Walsh , January 22, 2009

Making a bigger push into e-commerce, YouTube is expanding its program that allows viewers to click on ads to buy content related to what they're watching.

Launched last fall in the U.S. and U.K., the "click-to-buy" ads will now also appear in Germany, Spain and the Netherlands in the form of links to songs from the iTunes Store. The program started with ads that embed links from Amazon and iTunes on videos from content providers including EMI Music and Electronic Arts.

In announcing the move Wednesday, YouTube said click-to-buy ads had helped boost sales of Monty Python DVDs "23,000%," prompting it to reach No. 2 on Amazon's Movies and TV bestsellers list after the celebrated comedy troupe launched a YouTube channel in November.

"The past few months have demonstrated that great content on YouTube leads to increased sales," the company boasted on its blog. It also noted that it will soon broaden the e-commerce program beyond music, DVDs and video games to embrace other types of products, which it did not disclose.

YouTube said it is also continuing to experiment with how links are displayed. "You may start to see click-to-buy links appearing as semi-transparent overlays that appear in the bottom of the video for a short period of time. This increased visibility should help even more people take advantage of this program."

As YouTube struggles to monetize its vast video inventory, e-commerce represents another path toward higher revenues for the Google-owned property. With brand advertising online hit hard by the recession, expect other social networking sites to expand e-commerce initiatives in 2009 as well.

"With ad models still in development and yet to gain true traction, e-commerce will definitely get more attention this year," said Debra Aho Williamson, a senior analyst at eMarketer. Examples include Facebook's virtual gift program, which allows members to send small icons or graphics to display on their profile pages.

Inside Facebook estimated that the company is already generating $30 million to $40 million a year from virtual gifts. Facebook is also rumored to be readying its own music service with e-commerce features to compete with MySpace Music. Amazon supplies the download store for the MySpace service launched last year.

In its announcement Wednesday, YouTube also noted that content providers can add click-to-buy links through its ContentID service, which identifies user-uploaded videos containing unauthorized material. Content owners can then choose to block or monetize the videos.