A new advertising system has been announced by Google. Instead of its now traditional cost-per-click arrangement centered around Adsense and AdWords, the company has introduced “Pay-Per-Action — Pay only for actions that you define”.

“… you’ll create an ad and define the action that you want a user to perform when they visit your site, such as signing up for your newsletter or purchasing a product. Then you’ll set the amount that you’re willing to pay when this action is completed.”

The point of the procedure is that you’ll only pay when a user clicks on your ad, visits your site, and completes your desired action.

Pay-per-action ads complement your current campaigns by providing a new pricing model that extends your reach and allows you to pay only when a defined action is completed on your site. This beta feature is currently available to AdWords advertisers in the United States on a limited basis as part of our beta test. Read below to find out more.

Michael Arrington at TechCrunch thinks the new ad system will crunch the affiliate middlemen. “Affiliate marketing networks like Commission Junction and LinkShare are screwed. These networks also operate on a cost-per-action basis, mostly with online retailers. Even though some of them have scale, they will not have the ability to compete with Google on sheer size of network.”

That remains to be seen, but no-one can fault Google’s determination to remain in the forefront of internet advertising.

Google today announced Apps Premier, its subscription package of premium, hosted business applications in direct competition with Microsoft.

For $50 (£26) a year per user, Google Apps Premier Edition will offer business customers a number of web-based applications including email, word processor and spreadsheet. It will compete with Microsoft Office’s desktop-based Word and Excel.

A Microsoft spokesman downplayed the launch, claiming online services such as Google’s are “not alone in altering today’s technology industry. Productivity applications represent a very competitive space in which more than 450 million users around the world have consistently chosen Microsoft.”

The Times (London) reports : “Microsoft’s Business Division, which includes Office, accounted for $3.5 billion of the group’s revenues of $12.5 billion in the latest reported quarter, making it the largest source of sales. However, industry insiders say that Google has been quietly preparing for months to tap Microsoft’s cash-cow. Keen to supplement its lucrative search business, Google has built massive data-storage plants, thought to be years ahead of those so far developed by Microsoft and IBM.”

This “cloud” is now being used to host both software and data, while the internet becomes ever more the operating system.

Tom Austin, of Gartner, the technology analysts, said: “This constitutes a real threat to Microsoft’s business model. Eventually, it will have to switch from limited-use licences to software as a service. That will require a fundamental reengineering.”

Despite investing heavily in Office 2007, which was released earlier this month and which, like its predecessors, is anchored firmly to the PC, Microsoft has earmarked $2 billion to develop its own data centres.

The company added that it is now partnering other businesses “to capitalise on emerging services, such as advertising-based software, subscription or on-demand software”.

Most of the Premier Edition components are already available free. “From today, for the first time, it will charge for “white label” tools that carry its customers’ brands, so that e-mail addresses can be in the name of the client company.”

Google is working with some of the world’s top publishers to do for books what Apple’s iPod has done for music.

Under the Google proposals, buyers will be able to download entire books in a format they could read on screen or even on mobile devices such as a Blackberry.

The move would give a significant boost to the development of ebooks and would have a big impact on both publishers and booksellers.

Jens Redmer, director of Google Book Search in Europe, announced : “We are working on a platform that will let publishers give readers full access to a book online. You may just want to rent a travel guide for the holiday or buy a chapter of a book. Ultimately, it will be the readers who decide how books are read.”

He believes that after many years in the doldrums, ebooks looked poised to go mainstream.

The Sunday Times reports : “Sony recently launched its Reader, a digital book device with an online book store stocking 10,000 titles. Amazon, the world’s largest online bookseller, is also planning to launch an ebook service.”

Evan Schnittman of Oxford University Press — a Google partner — said he foresaw a number of categories becoming popular downloads : “Do you really want to go on holiday carrying four novels and a guide book?”

This will be part of Google’s Book Search service. Its partnership with publishers will make books searchable online with publishers’ approval. Links will then guide buyers to sites where they can buy a physical copy of the book.

Penguin, HarperCollins and Simon & Schuster are among those involved in the project.

Google has made some improvements to its Blogger.com service — not before time, say some. The Official Google Blog reports :

“Blogger has always been the easiest-to-use blogging software around, but it just got way more powerful. We’ve added a bunch of new features, which you can check out in the new version:

“You can add stuff to your blog (cute cat photos, lists, feeds) without needing to know HTML.

“You can also make a completely unique template that has just the color scheme you want, without knowing any CSS.

* Don’t want your mom to read your thoughts? Make a private blog.
* Label your posts, to group related ones together.
* Use one of our new templates.
* You can now sign in to Blogger using your Google Account.”

They seem to be making some progress on the splog issue too, but it remains a problem still.