Google searches a new source of cash

Slashdot It! Google begins testing a new program that lets Google's customers buy ads in more than 50 top newspapers, including The New York Times, Philadelphia Inquirer, San Jose Mercury News and seven papers owned by Gannett , the publisher of USA TODAY. Google is acting as a middleman to help increase newspaper ad sales by opening a one-stop online shopping solution to its existing base of hundreds of thousands of customers. "The plan is to bring lots of new advertisers and revenues to newspapers," says Tom Phillips, director of print advertising for Google. How does it work Google sells search advertising at its AdWords.google.com site, where businesses bid on the search term ("Florida insurance" "Detroit lawyer") they want. The more people interested in the term, the more expensive it is. Google will add a "newspaper advertising" tab in AdWords that will let businesses bid on buying advertising space in newspapers, in a variety of sizes. Customers will get tools to upload photos and type in information to create an ad on the spot, then they can send it directly to the newspaper.

The newspapers have veto power over the ads and set the prices they will accept. "For us, this opens up a new level of advertisers," says Denise Warren, the Times chief advertising officer.

Google gets a small commission for each sale but wouldn't reveal the percentage. Still, newspapers have more to gain than Google, says Greg Sterling, an analyst at researcher Sterling Market Intelligence. "It creates additional inventory and higher revenues," he says. "It gives them reach to Google advertisers, who probably haven't thought much about advertising in print."

The search giant's success has been based on performance-based advertising, meaning clients have to pay only if someone clicks on their ad. But Phillips says the newspaper ads will be traditional print ads.