The weakness of Google Adsense and the competing text ad product from Yahoo! is that they pay sites in their network for visitors who click on the ads. The network sites are given no credit for giving advertisers branding or introducing an advertisers to its visitors and then having them click on the ad the next time they see it–on someone else’s site.
In essence, the current model provides websites no credit for putting an advertiser’s name and product into play on the internet. Banner advertising, of course, does offer this incentive. It is often sold based on a cost-per-thousand viewers reached.
Even Google’s new "cost per action" program does not address the problem. If a visitor to a website opens an account with the advertiser, the site gets paid. But, if the site exposes the user to the advertiser’s name, but the action is take at another site, the first website gets nothing.
Microsoft could pick up a very large portion of the text advertising from Google and Yahoo! by doing one thing–paying websites a very small amount per impression, per pages where an ad is viewed. The payment could be modest, but would give sites credit for getting an ad in front of visitors. If the visitor takes an action, the payment increases.
Microsoft says it is serious about making its search properties and MSN successful instead of being "also rans" trailing Yahoo! and Google by miles. It may not be a coincidence that MSFT is rumored to be looking at ad serving giant DoubleClick.
Well, Mr. Ballmer, here is chance to turn the text search ad business on its head.
Douglas A. McIntyre
Top Gaining Stocks
Top Losing Stocks