Taking a page out of the Google (NASDAQ:GOOG) playbook, MIVA (NASDAQ:MIVA) is trying its hand at giving small website publishers a shot at sharing some of its ad network revenue.
Launching the MIVA Monetization Center is a good idea on the surface. Having a network of third-party sites serving up your pay-per-click contextual ads is a great way to grow your reach and win over new sponsors.
MIVA is no stranger to the winning ways of Google. Earlier this month, the company agreed to serve up Google ads on some of its content pages. However, the monetization center may not be a winner for the same reason that MIVA has turned to both Yahoo! (NASDAQ:YHOO) and now Google to fill its billable ad space.
Publishers turn to Yahoo!'s YPN service to rebroadcast top-paying ads. They turn to Google to have access to its broad depth of advertisers. Where does that leave MIVA? In its September quarter, MIVA generated $17.2 million in domestic media revenue on 240 million clickthroughs. Break that down and you get a paltry $0.07-per-click average. How much of that will MIVA be able to return to its publishers? In short, a lot less than they would be making through YPN or Google's AdSense program.
So who will this program attract? If all it draws out of the woodwork is the crooked self-clicking publishers who got booted from the Yahoo! and Google programs, MIVA is going to lose credibility with its advertisers.
MIVA does have a shot overseas, particularly in Europe, where it has an established presence through its eSpotting acquisition. In fact, the company announced a paid-search deal yesterday with Johnston Press, the second-largest local newspaper publisher in the United Kingdom. That's the good kind of news investors want to hear from MIVA. You can be small and still compete in paid search when you specialize, like Marchex (NASDAQ:MCHX) has in personal finance.
The new publisher monetization tool? That isn't such an applause-worthy move. Just because you build it doesn't mean that publishers will have a reason to come.
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Longtime Fool contributor Rick Munarriz still believes in the paid search sector. He does not own shares in any of the companies mentioned in this story. The Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
