Auctions and mechanisms in keyword-based advertising

Michele Budinich
Today most of search engines’ profits come from advertising, and in particular from sponsored search. In sponsored search, advertisement slots next to search results are sold. When a query is made, besides processing the query results themselves, the search engine selects ads relevant to that query. Two of the main characteristics of this form of advertising are that advertisers are billed only when a click on their ad is made, and that prices are computed...