An Ad Exchnage?

It's interesting to observe the evolution of online advertising industry.

Bill Gross was one of the first men to come up with the concept of paid advertising.. he started the ball rolling with goto.com... the company became public in 1999 and two years later was renamed Overture Services. In 2004 it was acquired by Yahoo!

Next big step came from Google's Adwords and its bidding system... The system is based on a very sound algorithm which calculates your cost for click based on several factors such as the CTR history, your "quality score" and your bid amount.. In a typical Google fashion, it makes the auction more "user friendly" by making it a second-price bidding system...(Well, my auction theory Prof might disagree that it's a second-price bidding system, as you pay slightly higher than the next best bidder. But we can live with this small glitches for the time being)

In my opinion, the third most important step of the industry is the introduction of the "Ad exchange". Rightmedia is one of the companies to introduce this concept and recentlty there is again some movement in this field, with the introduction of ADSDAQ
It's again an advertising exchange and works very similar to your stock exchanges. (follow the link for more details)

Only time will tell if it is actually going to be a paradigm shift for the entire industry or it is just one of those fads (like paying users for the clicks) that dies quickly. I believe (and hope) it's the former.