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With a desire to capitalize on the Internet advertising industry that made $2.3 billion in the first quarter of 2004 alone, ValueClick has announced an upgrade to its search engine-marketing program.

The addition, called ChannelSearch, according to socalTECH.com, will "enable its customers to purchase both context-targeted ads and search keyword ads."

ValueClick has updated its site to reflect these changes. SocalTECH's article states that this new ad service will function on a flat-rate CPC basis. Ads will be available in graphical form and as sponsored search engine keywords. ChannelSearch ads will appear on ValueClick's recently acquired Search123 search engine.

With keyword sales accounting for 35% of advertising revenue generated 2003, coupled with the positive report released on internet marketing as a whole, companies are falling over themselves to create a viable presence within search engine advertising.

ValueClick's search engine-based ads are following the model set by Google and Yahoo-owned Overture. Google's main sources of revenue are its AdWords/AdSense programs. Reports indicate that Google can attribute up to 95% of their revenue to its ad services. Not only do Google ads appear on their own results pages, Google's AdWords service is featured on other SERPs as well.

AskJeeves, one such search engine, receives up to 80% of its revenue from Google's ad programs.

Overture is another company that ValueClick is modeling their search engine marketing approach after. Overture, much like Google, sponsors ads that appear within search engine results. Overture's ads appear as sponsored search results or as content matches appearing on sites they have partnerships with.

Overture experienced financial success similar to Google's, seeing its advertising revenue for the 2004 first quarter grow some 48% when compared to the first quarter of 2003.

Its numbers like these that are inspiring companies like ValueClick to jump into or expand existing search engine advertising services. The biggest difference between the search advertising giants and smaller companies like ValueClick is that Google and Overture-sponsored ads appear all over the Internet.

ValueClick's search ads, on the other hand, will be appearing on their proprietary search engine, Search123. However, if this new service is successful, one could see ValueClick expanding their service by having ChannelSearch ads appear outside of their search engine, much like Google's AdSense ads.

This move continues a busy week for the search engine/internet advertising industry. Yesterday, Kanoodle announced that it would be partnering with 24/7 Real Media in order to provide behaviorally targeted links for their search-related businesses. BURST Media, not wanting to leave behavior-based targeting to Kanoodle, partnered with Tacoda to offer this type of targeting as well.

The main difference between the two is that Kanoodle is targeting the search industry, whereas BURST is targeting its clients and their audience.

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