Amazon’s new program called Context Links is very similar to Google’s adsense program in that webmasters place a bit of code on their website, amazon spiders the page to understand the content, then displays advertisements for products that are relevant.

This could be a program that gives Google a very serious run for their money for two very simple yet important reasons.

The first reason is that the new Amazon Context Links program takes at least one click away from the process of purchasing something. What do I mean by this? I mean that one of the most important rules of Internet marketing is getting your customer to exactly what he or she wants in as few clicks as possible. With google adsense a web visitor clicks on an ad which takes them to the site that will sell the product. That’s one click! But with Amazon when you click on a context link you are taken directly to a shopping cart! Voila, does it get much easier than that? That is a very streamlined purchasing process and at least one click less than the google process.

The second reason is that of business intelligence. Amazon has amassed a substantial amount of information about people, what they like, and what they purchase. And they have leveraged this information very smartly by understanding the concept of “If a person likes this they will probably like that too." You see a good example of this every time you go to the Amazon.com main page. It is stuffed with personalized items that are recommended to you based on what you have looked at or purchased in the past. This is an extraordinary intelligence tool that has the potential to make Amazon a player in the contextual advertisement arena.

Where could it go wrong? Knowing what people like and knowing that “if a person likes this they might like that" might not translate well into the contextual advertisement arena because webmasters are putting content on their pages and not products. So Amazon has to interpret that content and make the right recommendations. And that is quite a different ball of wax. A ball of wax that google has mastered.

The contextual advertisment market is a market that google created and changed the Internet with. It will be interesting to see how Amazon fares with it now that they have thrown their hat into that multi-billion dollar arena.