AOL to offer Google ads for its search sites

AOL will for the first time be able to offer ads for its Web search engine, thanks to an agreement with Google

Businesses interested in advertising on AOL's Web search engine will now be able to do it, thanks to an agreement between the Time Warner subsidiary and Google.

AOL's Web search engine has for years displayed ads from Google's AdWords network. But until now, AOL couldn't directly offer its advertisers ad space on its search engine site.

With the new AOL Search Marketplace, launched Monday, AOL's advertisers will be able to purchase ads to run exclusively on the AOL Web search engine site, as opposed to on the broader AdWords network. AOL Search Marketplace is a white-label AdWords service fronted by AOL, which will split ad revenue with Google.

The new ad service will let AOL for the first time offer its advertisers not only display ads, but also search ads, and thus a more complete online marketing campaign. For AOL, which is transitioning its business from subscription fees to online advertising, this added flexibility is significant. In 2006, AOL's ad revenue grew 41 percent compared with 2005, a sign the transition is so far succeeding.

"We're leveraging our [years-old] partnership with Google to introduce new advertising products," said Dariusz Paczuski, vice president of search products for AOL platforms. "Previously we couldn't sell ads for our Web search engine. We got what Google sent our way."

The deal applies only to AOL's general Web search engine, not to its other specialty search sites, like local, shopping, image, video and news search, Paczuski said.

AOL Search Marketplace, which AOL tested in recent months with select advertisers, grew out of the expanded partnership AOL and Google struck in December 2005.

In other AOL search news, the company formally announced it is testing a new local search service that brings together features from its MapQuest mapping site and CityGuide local entertainment site. Meanwhile, in its comparison shopping service, AOL switched product information providers, signing up with PriceGrabber.com and ending its relationship with Shopzilla he said.

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