dannysullivan - 2:56 am on Apr 24, 2003 (gmt 0)

Google is acquiring what they consider to be the pre-eminent mind share and application infrasture in this space. Remember, for Google, the concept of ADwords is still quite new and not without its problems. We can't expect that Google can mobilize in the contextual advertising space in the position of a leader without acquisitions. That would be far too expensive and unreasonable.

Actually, I'd say Google considers themselves to be the preeminent mind share in the contextual space. After all, they rolled out a much larger system than Applied Semantics did and without acquiring AS at the time. Nor did they suggest that they were having any problems in doing this.

The AS DomainPark program is far larger than its contexual ad program, and that's the real gem Google has picked up. All new traffic, a system that Google has nothing like and traffic that will be taken from Overture.

That's not to downplay that Google will pick up the AS contextual ads technology and make use of whatever benefits that offers -- as well as the people and limited partners involved with the AdSense contextual program. But buy AS to solve the "turkey" problem? Hey, Google was adamant that this wasn't a problem with its existing contextual ads technology. AS tech may help refine this, but it's already supposed to be a core compentency of Google's contextual program.

What Google cannot do well -- or at least has never shown this -- is autocategorization of content. AS technology takes paid links, then puts them all into nice, neat subject categories that forms the heart of its money-making DomainPark program.

That categorization technology may now get some other uses, such as to help people refine queries when doing Google web searches (look for cars, get suggestions to also search for trucks, used cars, sports utility vehicles).