How Google Took the Work Out of Selling Advertising

The NY Times writes – The innovation in question is Google’s AdSense program, unveiled last summer. Google’s original way of making money, and still its largest source of revenue, was search-driven ads. You enter, say, “vacation homes in France,” and with its usual list of sites Google shows a list of “sponsored links” from advertisers, who have paid to be associated with those terms.
“AdSense was really a very natural outgrowth” of this search-dependent system, said Gary Stein, a senior analyst at Jupiter Media in San Francisco. (No one from Google would comment about its products because the company is in the “quiet period” before its initial public offering.) “Google had this great database of advertisers, and the keywords they were interested in,” he said. “But they had to wait for the searches to happen.”
AdSense allows Google and the advertisers to avoid the waiting. Google’s great technical strength – the “sun in its solar system,” as Mr. Stein put it – is the way it automatically grasps the themes and emphases of each Web page. With AdSense, anyone who operates a Web site – a blogger, a community activist, a retailer – installs a bit of code that transfers control of part of each page to Google. Then users who visit the page will see a short list of ads that, according to Google’s analysis, represent the most likely match between the subjects discussed there and the advertisers’ products – ads for veterinary supplies on a cat fanciers’ site, for example. Each time someone clicks on an advertiser’s link, the advertiser pays a fee to Google, and Google passes some of that on to the Web site operator. (full article)