We are starting to see more CPC fragmentation by the major players on both sides: as ad buyers and content providers.

For Ad Buyers:

  • Ask launched a CPC Engine (which, by the way, is speculated to be partially powered by Looksmart)
  • MSN will announce, according to the WSJ, plans for a paid search engine next week (called MSN Keywords).

    • Fragmentation of the major sources of traffic may mean people may pick the top 1, 2 , or 3 engines that deliver number of clicks and/or in transactions/ROI since managing the different interfaces and staying on top of the media buying is seen as an ongoing/expensive operation. Alternatively, we may see SEM companies booming (or companies may elect to hire these people with the expertise and bring them inhouse to reduce their costs).

    For Content Providers:

  • Yahoo launched a contextual advertising product similar to Google’s Adsense.
  • MSN may have such a function when they launch their ad engine, especially for distribution on sites they already host with user-generated content such as MSN Spaces (their blogging site).
  • Ask may do the same since they own Bloglines but who knows if either will offer it as an option to users to generate revenue.

This means more than 1 alternative for the smaller content providers. Most people are aware only of Google’s Adsense and Overture/Yahoo will usually only work with those with sufficient traffic. There are definitely others but not with the same type of coverage in terms of keywords and customers. MSN and Ask (thanks to IAC) have the traffic and, possibly notoriety, to reach a good amount of critical mass.

The next question is, given the way AOL is opening up its services, potentially to capture more traffic, where are they in all this (they currently use Google)?

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