Here is the Fool.com article ---------------
As amazing as paid search has been -- and just pull up the numbers that Google (Nasdaq: GOOG) and Yahoo! (Nasdaq: YHOO) have been posting lately -- you don't really hear too much about the flip side of the equation. After all, if websites everywhere are taking to contextual ad blocks, doesn't logic suggest that graphic banner ads and affiliate marketing are being pushed off the page?
You don't need to guess. I can assure you that DoubleClick (Nasdaq: DCLK) wouldn't have accepted a buyout offer last month for a mere $8.50 a share if it thought that the future was bright. If graphic ads were all the rage, do you think that Fastclick (Nasdaq: FSTC) would have shed a third of its price since going public at $12 two months ago despite serving up 5 billion ad impressions a month?
There are some even bigger companies that are likely to suffer if this trend continues. One of the oldest, best run, and most prevalent affiliate marketing programs belongs to Amazon.com (Nasdaq: AMZN). Paying websites a percentage of sales that result from referrals, the Amazon Associates program has been the envy of the online world. Since the program launched in 1996, the company has signed up 900,000 participants from established sites to amateur home pages. A great deal of Amazon's growth, at least early on in its life cycle, was due to ambitious grassroots marketing through its affiliate plan. Other companies like eBay (Nasdaq: EBAY) and Rule Breakers newsletter recommendation Overstock.com (Nasdaq: OSTK) have used affiliate marketing to drum up incremental sales. What will become of them? Why would any webmaster feature a single graphic ad when that same space could be replaced by as many as five targeted text ads from Google? While most dot-com marketers have made the transition to paid search -- even the most eclectic of searches on Google may result in an eBay sponsored link -- Amazon is different. It is deeply integrated into way too many sites, and if webmasters see that it is more cost-effective to strip out Amazon ads in favor of paid-search ad blocks, the leading online retailer is going to suffer in the process.
So, yes, what companies like Google and Yahoo! are doing is amazing. Just watch carefully those companies that stand to lose if paid search continues to blanket the Internet.
Want to read more about how text ads roughed up the graphics space?
- DoubleClick did sell itself for a historically cheap price.
- Fastclick has been a broken IPO.
- And if things weren't bad enough, even Google is now offering content publishers graphic banner ads.
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