It appears that Google is going to be following in the footsteps of Pheedo and Kanoodle by offering contextual RSS ads. This will definitely open up a new stream of potential revenue for content publishers, and will give flexibility to the limited display of Google Adwords. An article from ClickNewz gives an idea as to what Google has been cooking up with RSS feeds.

The search giant started testing a version of its contextual ads that would help advertisers tap into new inventory on RSS or Atom feeds, and potentially help publishers monetize content distributed through that channel. Though Google declined to comment on the new implementation, word spread via its publisher partners.

The first site to test the new Google ads is a Microsoft-focused blog called Longhorn Blogs, published by Robert McLaws. McLaws said he and others were approached by Google to be “alpha testers” of the new RSS ads. He has been tight-lipped about the ads, at Google’s request, but did say the test is expected to last a few weeks before a broader public beta begins.

Wednesday, some blogs in the Weblogs Inc. network, including Engadget, the Unofficial Apple Weblog and AdJab, began showing the ads in their RSS feeds.

“This is gonna be huge,” said Weblogs Inc. founder Jason Calacanis on his blog. He noted that being able to make money from RSS feeds allows publishers to offer full-text version, instead of just headlines designed to make the reader click through to the site so ads can be shown.

[Continue reading Google Turns Attention to RSS]