Sponsored search auction

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A sponsored search auction (SSA), also known as a keyword auction, is an indispensable part of the business model of modern web hosts. Currently, the overwhelming majority of the search engines' revenue stems from SSA. For example, Google's total revenue in 2004 was equal to $3.189 billion. Over 98% of the revenue came from SSA. Yahoo!'s total revenue in 2004 was equal to $3.574 billion. It is believed that over 50% of Yahoo!'s revenue is derived from sales via SSA. To appreciate the size of the market dominated by SSA, note that the combined market capitalization of Google and Yahoo! is over $125 billion. In comparison, the combined market capitalization of all US airlines is about $20 billion.