Taking Out Google

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MeCommerce, a new contextual advertising platform that launched this week, isn't exactly a household word. However, that may change if its "Capitalism Done Right" mantra catches on with bloggers and small webmasters.

As the handiwork of GoodStorm.com, a company founded to aid nonprofit fundraising efforts, MeCommerce is blending the two most popular third-party affiliate programs -- Amazon.com's (Nasdaq: AMZN) Associates and Google's (Nasdaq: GOOG) AdSense -- into a single module.

Bloggers can single out products they recommend, and a simple insertion of MeCommerce code will populate the page with product listings. The site gives bloggers 50% of the profit. In its example, MeCommerce singles out a $25 book that actually costs $15. MeCommerce and the blogger would each take a $5 cut. If that's the kind of payout that materializes, Amazon is going to have a hard time convincing its affiliates to stick around for a 4% cut of the referred sale (that increases to as high as 8.5% if more than 9,401 items are sold by the affiliate in any given quarter), when MeCommerce is paying 20% of the actual sale price.

The MeCommerce pitfall here is if its prices are out of whack with what media discounters like Amazon are charging. That would be more like "Capitalism Done Naively" if it plays out that way.

One thing working in MeCommerce's favor is that the transaction takes place on the actual blog or website. AdSense pays for the lead, not the actual purchase, but it whisks clickers off to the advertiser site. Amazon Associates allows the option of opening up the referral link in a new window.

This comes after last month's announcement from eBay (Nasdaq: EBAY) that it was launching a module for bloggers to insert auction listings into their pages in exchange for a cut of the transaction fee. Wish eBay luck on that. eBay AdContext already has its own landing page, but it's still not open to the public.

The leading auction marketplace is going to have an uphill road with that product. Bloggers have been spoiled by Google's pay-per-click model, and Amazon and now MeCommerce appear to offer a bigger piece of the action than a slice of eBay's meager transaction fees. That's even before we consider that an AdContext publisher may still send a worthy lead over that won't result in a winning bid.

It's easy to see why eBay needs to do this. Building out a third-party network is important, and eBay has run an aggressive affiliate program for years. It will have to make its offering stand out and prove to be a healthy converter. In the end, it will have to be more financially rewarding to the publisher than products already on the market. At first glance, it doesn't appear to be succeeding on any of those fronts, but I welcome the chance to chime in in a few weeks or months to admit that I was wrong.

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Longtime Fool contributor Rick Munarriz is a satisfied eBay user, with 166 positive feedbacks to show for it. He does not own shares in any of the companies mentioned in this story. Rick is a member of the Rule Breakers analytical team, seeking out the next great growth stock early in its defiance.