K-Praxis: More on Google buying Sprinks

K-Praxis revisits their August 2003 analysis of players in the contextual advertising space and concludes that Google‘s purchase of Sprinks is a very calculated move. They say: “Google is winning because it was first to understand contextual advantage of content.”
I’d reword that to say “Google understands the relationship between distribution and affinity and knows how to build an ad model around it.”
What does that mean:
1) Google figured out moving their contextual ads to other search partners–like Netscape and AOL–would make them more money.
2) Then they figured out that they didn’t need to power search per se to power those ads–they could distribute contextual ads on non-search pages.
Thus was a bright new model born (with lots of inspiration from Overture, of course).
3) Next, they figured out that if they populated high-demand, high-interest–and high-volume pages with contextual ads, they’d make more money.
If there was ever any business reason for buying Blogger, as opposed to just wanting to keep them afloat, this would be the reason.
4) Content is affinity with a topic, or in some cases, a brand. The affinity can be with top shelf content–think the Financial Times–or with community content- MassLive.com local blogs–but the affinity keeps the audience coming back. And the Google ads are there, making money every time.
This is the smartness of this model–back in the day, GeoCities and other “community” sites couldn’t get banner advertisers on their pages cause advertisers felt the quality of the audience would be low–now, ad words sell just as well on little targeted and community sites as on big portals and sports sites–in some cases, even better.