eBay to sell ads through other Web sites

Developer sees new contextual system as a way for bloggers and other small sites to generate revenue.

LAS VEGAS (Reuters) - Online marketplace eBay Inc. is set to unveil a keyword advertising system for eBay sellers to promote auctions on other Web sites, borrowing from the strategies of Google and Yahoo.

Michael van Swaaij, eBay (Research)'s chief strategy officer, told a conference of software developers here Saturday of plans to allow eBay's army of auctioneers to run contextual ads on other Web sites in exchange for a cut of the resulting eBay sales.

eBay's system differs from existing pay-per-click advertising systems offered by Google and rivals Yahoo Inc. and Microsoft Corp. by linking only to eBay auctions rather than serving as a generic advertising network.

The world's largest e-commerce site said it plans to provide hundreds of thousands of eBay auctioneers with simple snippets of code they can embed on other Web sites that showcase items that are for sale on eBay's site.

A test of the program, dubbed eBay AdContext, is set to be introduced early next week, Swaaij said. What goods appear in any particular advertisement will be determined by the keywords on that Web page, a technique known as contextual advertising.

eBay's system scans the text of a Web site for keywords and returns links to relevant eBay sales listings to the Web page. A Web site about sports could automatically feature links to sporting gear or memorabilia available on eBay, for example.

As listings change on eBay, advertising automatically changes on affiliated Web sites to reflect the new products or services for sale on eBay. Web site affiliates receive a cut of 35 percent to 60 percent of sales, depending on volumes.

"It is a way for Web sites to get an additional monetization stream," Swaaij said. Monetization is Internet industry jargon that refers to the potential for making more money by driving potential buyers to a Web site.

Such advertising, in effect, becomes another means for Web site owners large and small to make money to support their sites, especially blog site publishers, who often rely on small text ads from Google's keyword system to finance themselves.

eBay sees the AdContext system as complementary to, rather than competing with, the online advertising networks offered by Google and others. Many Web sites may offer both eBay and other advertising on their sites, spokesman Hani Durzy said.

The eBay Developers' Conference is showcasing how eBay is changing from a one-stop shopping center where everything happens on the eBay site to a supplier of auction, payment and communications technologies that can be used on any Web site.