YouTube bids on search terms

By: Allison McNeal

As the media grows increasing more dominant, companies are starting to open up online bidding.

YouTube recently stated that they will be releasing a new program called Sponsored Videos, which will lets users promote their videos by bidding on keywords.

The program will work by allowing users to decide which of the videos that have been uploaded they want to promote through site search.

The individuals then decide which keywords they want to target.

Google has also created automated tools that help users place bids for the keywords in an automated online auction and also set spending budgets.

When people use keywords in search terms for videos, YouTube will display relevant videos alongside the search results.

Cnet.com gives an example of if a film studio is on YouTube, they may bid on the words "movie trailer" to obtain those rights.

This new bidding seems to be a huge step in allowing online companies to make money off of their users.

YouTube currently has around 80 million users, but Google's cheif executive officer Eric Schmidt said that YouTube was not generating the kind of revenue the company hoped for.

Matthew Lui, a YouTube product manager, also agreed with Schmidt and said that the companies plans to implement this product was challenging.

"We've been working on this for months," Lui said. "The key was [that] we wanted to make sure we got it right."

"YouTube is a video discovery platform," he said. "We've been integrating with Google AdWords for some time, and now we're at a place where it can be win and win."

Will Google profit from the keyword bids?

The Sponsored Videos are priced on a cost-per-click basis, and only U.S. users can bid on video keywords.

The producers of Sponsored Videos are not certain on whether the program will generate revenues or boost YouTube's ratings.

YouTube has recently surpassed Yahoo to become the second Web search provider, behind Google.

According to cnet.com, "Google has launched other ad formats, such as posting links near videos, enabling visitors to purchase goods found in the clip."

This company also has signed deals that will bring full-length TV and film content to the site.

Even though Google is expanding their target audience, YouTube will have to wait and see if consumers are embracing this new technique.