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Google, which posted first-quarter 2005 revenue of $1.3 billion, up 93% year over year, is still under pressure as a public company to diversify its offerings. Rivals such as Yahoo and Microsoft Corp.'s MSN not only offer search, but also present a variety of other advertising options, such as online branding ads.
Google's new service is seen as a step in that direction.
'One revenue stream'
"Google is a very smart company, but no business is smart when it depends on one revenue stream," said David Hallerman, senior analyst at online market research firm eMarketer.
The new service is for advertisers who use the Adwords for Content offering. That service allows a marketer's text-based ads, in the form of sponsored links, to appear on Web sites that are contextually relevant to the ads. For example, an ad for tuxedo rentals might appear on an online magazine article about June weddings. Until now, Google chose which sites the links would appear on. With the new offering, Site Targeting, advertisers can bid to be placed on specific sites of their choosing. They can pick one individual site or a number of sites related to their ad on which to appear.
Google will still make the final decision as to whether the ad will appear on a site. "This is not a reservation system," said Tim Armstrong, vice president of advertising sales and operations. "Google is still choosing based on relevancy and value. But the advertiser has the ability to target ads."
Broader consumer reach
Site Targeting lets advertisers reach out to searchers before they reach the consideration part of the buying cycle, Mr. Armstrong said. "It's getting to the awareness part of the buying cycle."
And while Google continues to present the pay-per-click payment model for all its other services, Site Targeting is a cost-per-thousand-viewers payment model. "This allows advertisers to move into an impression-based realm," Mr. Armstrong said.
Ads in the Site Targeting program can be image-based or animated ads as well as sponsored links.
A beta version of the new system will become available to advertisers this week. The service will roll out fully by summer.