News just hit the wire that effective immediately, Google will no longer accept Cost Per Click (CPC) bids. Apparently, this is in anticipation of more branding dollars moving online and Google will still utilize Clickthrough rates in determining Quality Score, but will charge for ads on a CPM (Cost per Thousand Impression) basis.
My sources tell me that the new CPM rates are expected to earn more effective revenue with advertisers that have low clickthrough rates and also, allow them to embed advertising within the newly acquire YouTube network.
With this change, Google will also be showing image ads on SERP (Search Engine Results Pages), in the form of a 234×60 banner, after the search box. These image ads will start at a $100 CPM rate and bidders can participate from 1 April 2007 (today).
Yahoo have responded to this by announcing that they will continue their CPC policy and remove image ads from the My Yahoo homepage in an effort to promote their search box more prominently.
UPDATE (3 April 2007): THIS WAS AN APRIL FOOLS JOKE – DO NOT TAKE IT SERIOUSLY
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