SAN FRANCISCO, Nov 28 (Reuters) - Software maker Adobe Systems Inc (ADBE.O: Quote, Profile, Research) and Internet company Yahoo Inc (YHOO.O: Quote, Profile, Research) said on Wednesday will offer a service to let publishers run advertisements inside Adobe's popular document reading software format.
Ads for Adobe PDF Powered by Yahoo, as the new service is known, presents publishers with an alternative to conventional subscriptions, which, if widely adopted, could open up a new model based on free, ad-supported publishing, analysts said.
The service allows publishers to generate revenue by including text-based ads linked to the specific content of an Adobe PDF page. The advertisements can only run in a side panel separated from the publication's actual content.
"People want content for free," said Matt Swain, an analyst at market research firm at InfoTrends, who has been briefed by the companies on their plans. "The question is how do I reach consumers without charging them a subscription fee?" he said.
The service is set to begin public testing, the two companies said. An earlier private test included technology and professional publishers IDG InfoWorld, Wired, Pearson Plc's (PSON.L: Quote, Profile, Research) Pearson Education unit, Meredith Corp (MDP.N: Quote, Profile, Research) and Reed Elsevier NV (ELSN.AS: Quote, Profile, Research) (REL.L: Quote, Profile, Research).
The free service requires no special software and is open to U.S. publishers of English language content, initially. The public test is expected to run several months, officials said.
Publishers who join Yahoo's online advertising network get access to the Internet company's extensive network of advertisers based on the subject matter of their content.
"This is powerful up and down the spectrum of publishers," said Todd Teresi, senior vice president of the Yahoo! Publisher Network, of how customers may include everyone from media conglomerates to a school's parent-teacher group newsletter.
Advertisers gain a distribution channel that can reach highly specific audiences based on their reading interests while allowing them to track how specific ads perform. The approach is akin to how Web-based, pay-per-click ads now work.
Publishers who rely on Yahoo for corporate brand or Web search advertising will have the option of delivering ads in PDF-based publications as well, he said.
"From an advertiser point of view this looks like an extension of our existing marketplace," Teresi said.
For consumers, the text-based ads are discreetly displayed in a panel adjacent to the published content with no moving or flashing elements so that they do not distract the reader as some Web advertising is known to do.
Each time the PDF content is viewed, targeted ads are dynamically matched by Yahoo to the content of the document. The publisher receives anonymized reports about which ads ran alongside which published content.
In terms of relevance to advertisers, such ads could rank above conventional Web-page banner ads in terms of targeting capacity, but somewhere short of highly specific keyword-based Web ads, Teresi said.
Publishers who register for the service simply need to upload their Adobe PDF-ready materials to that they can be ad-enabled. The content owner then distributes the PDF in any of a variety of ways, including over e-mail or via the Web.
Details are at advision.webevents.yahoo.com/adobe/
An Adobe executive said the project remained in an experimental stage, part of a "long-term market evolution."
The deal with Adobe is the latest move by Yahoo to expand the reach of its advertising beyond Yahoo-owned sites. Since last year, Yahoo has signed partnership deals to supply online ads to online auctioneer eBay Inc, cable television giant Comcast, a consortium of U.S. newspaper groups and others.
(Editing by)