David Utter first reported AOL’s interest in Quigo on November 7th; in comparison to the Google-DoubleClick proceedings, this resolution occurred at lightning speed.  It also generally occurred according to plan, as the AdSonar technology and FeedPoint business we heard about remained involved in the deal.

Quigo’s CEO distanced himself, however.  "Quigo CEO Mike Yavonditte will head for the door," reports Nicholas Carlson.  "He’ll spend the next six months pretending to work as an adviser to Curt Viebranz, president of AOL’s Platform A advertising division."  And that can’t be too encouraging to other Quigo employees.

But they should be relatively safe, as AOL chairman and CEO Randy Falco stated, "Quigo is an important part of our new Platform-A organization that we announced in September."  Platform-A is, by all accounts, the future of AOL.

Now the only question is whether or not AOL’s newest employees will get their business cards in time for Christmas.

AOL Acquires Questions and Answer Service Yedda, Inc., announces the AOL press center, just one week after purchasing contextual ad company Quigo, AOL scoops up Yedda Inc, a people-powered, quester & answer service.

Yedda’s semantic matching technology intelligently routes questions to relevant communities of Internet users who can "syndicate" their expertise and spark a community-wide dialogue of people invited to discuss and learn from each other’s experiences.

Ron Grant, President and COO of AOL, said, "In the course of our daily lives we often leverage the experience and expertise of friends, colleagues and professionals like doctors and lawyers to get answers to questions we have. Incorporating Yedda’s unique technology into AOL enables us to bring together our traditional search resources and an entire community of people to help users quickly find answers to questions."

On the other hand, Avichay Nissenbaum, CEO and Co-founder of Yedda said, "We are excited about joining the AOL family. The services and technologies our team developed are a perfect fit with the AOL strategy. We will continue to empower knowledge communities throughout the Web, directly and through our network of partnerships, and we’re looking forward to weaving our unique value into the various AOL properties."

Comment …

Yedda is a question-and-answer service that’s seen a reasonable amount of success since its 2006 launch.  Yedda’s price tag remains unknown, yet since it’s raised about $2.5 million in funding, the service probably wasn’t too cheap.

That’s interesting, since AOL is supposed to be focusing on Platform A (which relates to advertising).  The acquisition of Quigo fed into this drive, but the additional purchase of Yedda doesn’t seem to relate.  So, despite fairly stunning losses (subscription revenues are down by 56 percent) and heavy layoffs, AOL’s not giving up on every non-advertising option.

Instead, it seems willing to go up against services like Yahoo Answers and WikiAnswers.  In reference to Yedda, Michael Arrington notes, “[T]hey also partner with others to power independent Q&A services as well.  There are more than fifty partners working with Yedda now – example partners are ePals and The JobNetwork.  Yedda says those partners now drive 90% of their total traffic.”

If AOL’s dreams come true, those partners will also drive some fresh revenue to its door.

AOL announced it would purchase Quigo for an undisclosed sum. Quigo touts its AdSonar technology that lets advertisers purchase ads on websites based on specific pages, sections, topics or keywords.

The deal also brings AOL a search engine marketing business. Quigo owns FeedPoint, which offers PPC, paid inclusion, and comparison shopping services.

Quigo joins Tacoda, Adtech AG, and Third Screen Media, the latter a mobile advertising company, as 2007 purchase by AOL. Randy Falco, chairman and CEO of AOL, said in a statement that Quigo will help them “put the final pieces of Platform-A in place.” Platform-A represents the advertising services AOL will offer marketers seeking display ad options.

Google Is Weak Because It Is Strong

I don’t remember reading the ‘weakness due to strength’ argument in Suzuki, but that was a long time ago. Google has a commanding position in search and advertising, and they are doing everything in their power to become entrenched enough that no one can do to them what they did to AltaVista and the rest of the search world.

If you read current wisdom, in this case the Bloomberg report about Google’s vulnerability to a precarious ad market, you might think Eric Schmidt is on his way to mixing half-caff double tall vanilla lattes for a living. The report cited the focus smaller competitors have on where an advertiser wants to appear on a given website.

“After beating down rivals, Google’s dominant position in the $40.6 billion online advertising market is showing cracks,” they said. Instead of Google deciding what ad and advertiser appears in a given spot, firms like Quigo provide the ad-serving technology while the publisher sells the spots.

Google’s growth, and that of the ad industry, seems to be slowing down, even as billions of dollars remain in play. The competitive marketplace has allowed some nimble players to grab business away from Google and Yahoo.

But Google and the big Internet firms have been looking to local and mobile search advertising, both of which have been gaining in importance. The Washington Post may be swapping Quigo for Google, but they are just one site out of the billions of possible, search-driven destinations a Google can deliver.

The top thread at TechMeme.com ballooned this afternoon as SEM bloggers, reading about this audacious upstart in the Times, stumbled upon the interesting part, quoted from Google’s Kim Malone, on page 2:

In the next few months, Google’s advertiser reports will begin listing the sites where each ad runs, Ms. Malone said. She added that advertisers on the Google networks would soon be able to bid on contextual ads on particular Web sites rather than simply buying keywords that appeared across Google’s entire network.

For advertisers that care more about branding than direct sales from search engine marketing, news like that is Vivaldi in the ol’ ear canal. But why was Google so quick with the me-too’s? Quigo was taking away some major business with a similar model, namely, ESPN.com, FoxNews.com, and Cox Newspapers.

So what are the experts so frantically blogging about? Let’s check it out.

Jennifer Slegg says:

This means that opting into the content network while having the transparency of knowing where your ads of being displayed just got easier. You will now be able to easily filter any URLs you don’t want your ads showing up on (such as for competitive or quality reasons) without having to opt-out of the entire network.

From a publisher perspective, if you have good quality sites in the content network, you have nothing to worry about and a lot to gain. If you have sites that are less-than-stellar, the kinds of sites that advertisers wouldn’t be so happy that their ads are appearing on, you might want to worry, or improve the quality of those sites

John Battelle says:

The key here is that in fact, Google *is* changing how it sells, and is pushing site specific and other approaches through its Adsense network. While direct response advertisers may not care about this, brand advertisers do, and it’s those advertisers that Google is now going after.

Interestingly, this is the same type of model that’s been used with television for a long time. The goal is to target mass audiences, even if some are still holding on to the super niche, where clicks still seem to convert better.

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Quigo picked up a high-profile win for its AdSonar auction-based pay-per-click advertising platform when it scored a deal with the World Wide Leader in Sports, ESPN. AdSonar is used by sites like the online home for Dilbert and other properties.

In announcing the deal today, Quigo chief revenue officer Henry Vogel said, “AdSonar will enable ESPN to capture the full value from its incredible brand equity and provide its advertisers with a new degree of transparency and success.”

The remark about transparency likely refers to how Yahoo and other big search advertising providers keep their proprietary algorithms and most other ad data a secret, even from their clients. ESPN’s motivation for the switch probably comes from a better share of the ad revenue than it received from Yahoo.

ESPN’s parent firm is The Walt Disney Company. The House of Mouse has a pretty healthy reputation at extracting the most money from its investments. An AdAge report on the deal noted some of the history Quigo and Disney share:

The explanation makes sense, mostly because Quigo puts the control of the auction, and thus the profits, in ESPN’s hands. Nearly 100 percent of revenue is better than 70 to 80 percent, depending on the previous deal Yahoo had with ESPN.

Now all we need to see is Deadspin bidding for the keyphrase “Chris Berman” in and ad auction and linking to this post on the Deadspin site.

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David Utter is a staff writer for WebProNews covering technology and business.

But the PPC search model has grown to mammoth proportions over the past few years, and companies are putting more and more of their media dollars into search to the point where there’s not enough inventory (via number of searches) to go around.

This drives up the cost of search for advertisers, and makes the channel less effective due to the glut of ads competing for consumer attention. Let’s face it, if there are 12 ads for cell phones in the first page of Google’s search results, it’s difficult to stand out from the crowd. So what’s a marketer to do?

Spending media dollars, one click at a time

There are a number of smaller, second tier, PPC search engines you can add to your media mix including MIVA, whose distribution network incorporates a selection of search engines and web sites including superpages, InfoSpace and search.com and boasts over 2 billion queries per month. Other tier 2 engines/networks include Enhance Interactive and eSpotting (for the European market). Be sure to track conversion and ROI closely with any PPC search campaign – Tier 2 engines are notorious for click fraud, although all engines claim to have processes in place to limit this.

Quigo is a contextual PPC network which is similar to the Google’s content network. You cannot target via keyword on Quigo, you target by category or “channel.” Quigo uses a PPC bidding model. Quigo’s distribution network is impressive and includes top destination and news sites such as Newsday.com, USAToday.com, Chicago Tribune, marthastewart.com and eDiets.com. Quigo provides advertisers with small budgets a way to get their ads on premium web sites affordably, and it’s easy to track ROI since it’s a cost per click model.

ContextWeb is another contextual PPC network. As with Quigo, advertisers do not bid at the keyword level on ContextWeb, but target by category. Ads appear on pages that are contextually relevant to them (e.g., an ad for cell phones might appear next to an article about wireless technology). ContextWeb works very well with popular categories such as health, travel, and technology. ContextWeb also sells graphical ad placements on a CPM basis.

Snap- It seems fitting to end this post with a paid search engine, although Snap.com offers a fascinating new twist to the current paid search model. This is a brand new search engine developed by IdeaLab, the brain child of Bill Gross (founder of GoTo which became Overture and is now Yahoo! Search).

Snap.com is different from the Yahoos and Googles of the world because the search results are visual. Advertisers bid on keywords and their ads are displayed beside an image of their landing page (via a split-screen interface). Snap.com is also the first paid search engine to offer ads on a cost per acquisition (CPA) basis. Advertisers define what an acquisition is when they set up their campaign (e.g., registration, newsletter sign up, sale, etc.) Currently there are about 2000 advertisers on Snap.com, so while there may not be a lot of traffic to the site , there also isn’t a lot of competition.

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Michael Pedone is the President / CEO of eTrafficJams.com, a search engine optimization and website marketing company <http://www.etrafficjams.com> located in Clearwater, Florida that specializes in getting targeted, eager-to-buy traffic to your site. You can catch him blogging at: <http://www.etrafficjams.com/blog/>.

In business, finding a way to cut out the middleman usually means a better deal for sellers and buyers. In the business of online contextual advertising, the middlemen have big online names: Google, Yahoo, and soon joining them will be MSN and Ask Jeeves, both offering keyword ad programs.

Newspapers have traditionally made money through advertising. Their readership has been falling as long-time and potential newspaper readers increasingly turn to other media. First it was the dedicated cable news channels like CNN; now it’s the Internet, where news organizations, search engines, and RSS aggregators offer the immediacy of instant access to breaking news.

Losing those readers means a drop in circulation, and that drives down what newspapers can charge for ads. The logical course of action indicates newspapers, the vast majority of which have related web sites, follow those users online and try to retain them through either specific local content or dedicated niche issue coverage.

Making ads part of an online newspaper site would mean dealing with a Google or a Yahoo. As the Wall Street Journal points out, papers have begun viewing these companies as competitors. Why give a competitor more money than they already earn?

One option offered by New York-based Quigo lets newspapers take auction based, pay per click (PPC) advertising in-house with a privately-branded solution called AdSonar Exchange. Quigo observes in a press release that their solution lets papers concentrate on local advertisers and own the ad inventory and design.

It sounds like a sensible solution, and Quigo already lists Newsday and Scripps Howard among its clients. A newspaper can price a local solution more competitively than a search engine’s ad service. For local advertisers, a newspaper site makes a lot more sense for targeting a demographic in a given region like a city or county.

With deals like Quigo’s available, maybe the newspaper business isn’t quite dead yet.

David Utter is a staff writer for WebProNews covering technology and business. Email him here.