Google's Amazonian Advertising Adversary

When 99% of your business consists of online advertising, it pays to know your competitors. Google (Nasdaq: GOOG  ) clearly knows its rivals. Do you?

I'm not talking about the obvious search-engine rock stars. I'm talking about less familiar paid-search nibblers, players you don't typically associate with selling ad space.

Let's take Amazon.com (Nasdaq: AMZN  ) , for instance. Friend or foe? Amazon and its associates are popular advertisers on the Google AdWords platform. The e-commerce giant sells products online, making it a logical prized account for an ad-serving company like Google. But how familiar are you with Clickriver, or Amazon's inline advertising initiatives?

Rumble in the Amazon.com jungle
It seemed that Amazon was turning its back on paid search when it began dismantling many of the features that made its A9.com search engine unique this past fall. Out went the storefront discounts for using the search engine. Poof went the BlockView initiative of street-based snapshots for enhanced roadmap functionality. A9 got stripped of everything fun and appealing, as if it were being left for dead.

I guess memories run short in the elephants' graveyard. The site is still alive and well these days. It's also guiding prospective advertisers to join the Clickriver cost-per-click beta test. The Amazon-owned product offers to place ads within Amazon.com itself. Amazon has no problem populating those pages with third-party ad networks, but it wouldn't mind fleshing out its sponsored listings on its own if it can generate high bids while cutting out the middleman.

But Clickriver isn't the only method Amazon is using to cut in on Google's sponsorship dance. This week, it opened up the beta testing of its contextual-marketing product to all affiliates.

What's an Amazon affiliate, you ask? The e-tail behemoth has been running its Amazon Associates program since the late 1990s. Webmasters of all sizes can sign up to receive HTML code that they can slap on their pages to promote Amazon products. They get a small piece of the action for any eventual sales.

You couldn't surf through a hobbyist site without running into dynamic graphic ads or sponsored hyperlinks a few years ago. That changed when Google's AdSense offered a more lucrative and less graphically intensive way to monetize websites with text ads.

Now Amazon is fighting back with its inline ads. Amazon can read the content on a given page and serve up relevant product ads that appear when your mouse moves over certain keywords in the text. It's essentially the same process that Google uses to serve up the best-performing ads in its text-based ad boxes -- just dispensed in a different way.

Getting in line with inline
Google doesn't offer inline advertising, which may explain why Amazon is going that route. It may also shed some light on why its smaller competitors are doing so, too.

I spoke with MIVA (Nasdaq: MIVA  ) president Seb Bishop yesterday, asking him why a publisher would choose the company's MIVA MC over the more popular AdSense and Yahoo! (Nasdaq: YHOO  ) YPN contextual-marketing programs.

Bishop spelled the things that distinguish MIVA MC from AdSense. Publishers can specify keywords to attract relevant ads, a feature that Google reserves for only its largest third-party sites. Bishop also pointed out the recent introduction of inline ads, as well as the ability to attract sponsors by including small corporate logos in the ads.

Putting the ball into play where Google isn't necessarily looking is a sound strategy. I caught up with Marchex's (Nasdaq: MCHX  ) CEO last summer, who pointed out that emphasizing niche areas of advertising like finance and information technology have helped it top Google in landing large publisher accounts like CNET (Nasdaq: CNET  ) and Morningstar (Nasdaq: MORN  ) .

The polite way to rob Google's bank
All of these nibblers don't seem to add up to a whole lot ... yet. Google continues to grow faster than the industry. However, all of these smaller -- and supposedly nimbler -- players in paid search can't be ignored.

When you have all of your eggs in one basket, no matter how pretty the basket, you can never lose sight of rivals painting their eggs in new ways.

Amazon.com and Yahoo! areMotley Fool Stock Advisornewsletter picks. CNET is an egg in theRule Breakersscorecard basket. Feel free to check out either stock-picking service, with a 30-day money-back guarantee as your safety net.

Longtime Fool contributor Rick Munarriz is a huge fan of Google; it would be his homepage, if Fool.com weren't taking up that piece of real estate. He does not own shares in any of the companies in this story. Rick is also part of the Rule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.


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