In the "good old days," Pay-Per-Clicks (PPCs) were actually considered Search Engines at which you bid for top listing in the actual search rankings. GoTo.com (which re-branded to "Overture" and which is now Yahoo! Search Marketing) was considered a good Search Engine. It even won relevance contests. After all, you only bid for "top spot" for a keyword if the landing page is relevant.

Many other "second tier PPCs" sprung up. FindWhat (now MIVA) was the first. It did a credible job, as did several of the others (ex., Kanoodle, eSpotting in the U.K.).

Then a subtle but important change happened. GoTo rebranded to "Overture" and, in the process, changed from being a "Search Engine" to a provider of advertising for other engines and portals.

Small businesses now bid for the opportunity to place contextual ads through Search Engines. And then... Yahoo! bought Overture. Yahoo! uses Overture to deliver ads on Yahoo! (and other engines') search results pages.

Google does the same, using its own technology ("AdWords"). Today, very few people perform searches on the actual PPC "engine."

Yahoo! also enabled businesses to place ads on major content providers such as CNN.com. In mid-2003, Google jumped a quantum leap beyond that. It extended the placement of contextual ads onto "small" content-laden sites. A natural source of income for SBI!'s "Theme-Based Content Sites!"

Second Tier PPCs Are No Longer Recommended

The world of PPC is a much different place now. Google AdWords and Yahoo! Search Marketing are the power-players. (Microsoft AdCenter will be launching its own technology, too.) The majors account for well over 95% of the PPC market, crushing the second tier PPCs.

And the fate of second tiers looks bleak. They have two critical, perhaps irreversible problems...

1) They are unable to generate the critical mass to drive enough "honest" traffic. The marketer-to-searcher ratio is just too high.

2) They are unable to protect themselves from click fraud. Click fraud is a huge problem. It plagues Yahoo! Search Marketing and Google, but they will figure out how to beat it... at a huge expense. Those resources are beyond what second tier PPCs can muster.

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