Feb. 7, 2007 -- The average keyword price paid by online advertisers in the fourth quarter of 2006 was $1.41, a 2 percent gain from the previous quarter, according to the Keyword Price Index released Tuesday by Fathom Online, a San Francisco-based marketing and technology services firm.

The moderate price increase follows a 16.5 percent gain in the third quarter of 2006, according to the index.

Dean DeBiase, chairman and CEO of Fathom Online, said prices spiked between the second and third quarters as advertisers made significant buys in anticipation of the holiday shopping season. By contrast, fourth quarter prices were flat due to reduced demand in December after the holiday shipping deadline had passed.

Keyword prices are up 4 percent on a year-over-year basis, according to the index.

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