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Google testing new ad formula

Clients would pay only if it aids sales

Google Inc., the most-used Internet search engine, is testing online advertisements for which clients pay only when Web surfers click on an ad and buy a product or generate a sales lead.

So-called ``cost-per-action" ads are being tested on the Google AdSense advertising network, Mountain View, Calif.-based Google said yesterday in an e-mailed statement. AdSense is a program that lets third-party publishers, such as writers of Web logs, show ads sold by Google on their sites.

Adding cost-per-action pricing may help companies more effectively track whether their online ad spending is generating sales. The approach may also assuage concerns from some advertisers about click-fraud, a practice whereby users maliciously click on ads to raise costs for competitors or line their own pockets.

``People have been asking for cost-per-action advertising for ages," said Danny Sullivan, editor of London-based SearchEngineWatch.com, which tracks the search industry. ``It's definitely nice to have the additional option."

The test is part of Google's wider expansion of its ad offerings as the company seeks to sustain surging sales, which almost doubled to $6.07 billion last year. Google also has added graphical and video ads to give companies more ways to promote their products .

``We're always looking for new ways to provide effective and useful features to advertisers, publishers, and users," Google said in the statement. ``We're pleased with how the test is progressing and will continue to gather feedback from advertisers and publishers."

David Jackson, who writes an investment Web log called SeekingAlpha, posted a copy of an e-mail from Google about the test on his site today. Google spokesman Brandon McCormick verified that the e-mail came from Google.

Cost-per-action ads won't compete with other AdSense ads in the online auctions Google uses to sell ads, according to the e- mail posted on Jackson's site.

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