Google Blogoscoped and Wall Street Journal are reporting on a new beta advertising product from Google named "Google Product Ads Beta." The new beta is invite only and seems to be a new way of advertisers paying for their ads, this time, based on conversions and commissions.
The ads are priced not based on click but on commission set by the advertiser for a conversion. Here is the FAQ emailed and captured by Google Blogosoped:
You specify the commission rate for conversions that take place via clicks on Google product ads. Minimum pricing is your standard publisher rate, plus the network fee. To maximize your competitiveness among advertisers participating in product ads, we recommend a higher commission with the Google product ads relationship.
These product ads will run independently of AdWords, but seem like they will show up in the AdWords location, as far as I understand. To be included, you must have a Google Base product feed. The ad rank technology is similar to AdWords, but differs based on the commission. Ad Rank = Commission × Quality Score.
Having products show up in the AdWords listings is extreme enough, having them prices based on an affiliate model is way more extreme.