Google deal to expand distribution of 'toolbar'

Google on Wednesday secured what promised to be another important distribution deal for its search engine "toolbar" as it races to secure its position in front of a mass internet audience before the launch of Microsoft's new Windows Vista operating system.

It also emerged that the search engine company was testing a new online advertising network that would let merchants pay a fee only when an internet user performs a specific action, such as buying a product or registering for a service.

In its latest distribution deal, Google unveiled an agreement with Adobe, the maker of graphics and other PC software, to offer the toolbar alongside the Shockwave player, a piece of software widely used to view video over the web.

Anyone downloading the player will be offered the Google toolbar at the same time, which plants a Google search box into the PC's browser. The arrangement echoes a deal Google reached with Dell, under which Dell will include the toolbar, along with other Google software, with new PCs.

As with the Dell arrangement, Google will pay Adobe for distribution rights, though terms were not specified. Shockwave, a media player that Adobe acquired with its purchase this year of Macromedia, is already installed on more than 55 per cent of all internet-enabled desktop computers, the companies said, and downloads run to "hundreds of thousands" a day.

Meanwhile, if successful, an experimental new advertising network, based on "cost per action", or CPA, would extend Google's range of advertising activities and reduce its reliance on the "cost per click" model that has been at the heart of its early success.

CPA networks, also known as affiliate marketing networks, let merchants sign up independent websites to help find new customers for their products or services. The website owner is typically paid only when a customer actually makes a purchase, or when they perform some other pre-determined action such as filling in a form on the merchant's site with their personal details.

Already used by companies such as Amazon.com, affiliate networks are starting to spring up more widely on the web.

Ebay launched a form of CPA network of its own last week, offering to pay affiliate websites that carry its auction listings a share of the sales commission if the adverts result in a sale. A number of online advertising services companies, such as ValueClick and DoubleClick, also run affiliate marketing networks.

Websites that take part in Google's test will be able to select merchants whose adverts they want to carry on their site. The adverts will be carried on a separate advertising network, rather than the AdSense system that carries the company's cost-per-click ads.

According to details from Google circulated to potential test sites, the adverts can run in parallel on a different part of a webpage to the cost-per-click ads, and so represent an additional way for websites to "monetise" their internet traffic.