Internet giant Google has decided to sponsor several research projects undertaken across three leading universities in Israel.

Yissum Research Development Company Ltd. - the Technology Transfer Company of the Hebrew University of Jerusalem;  Ramot at Tel Aviv University, Ltd. - the Technology Transfer Company of Tel Aviv University; and the Technion Research and Development Foundation at Technion - Israel Institute of Technology have announced that they will collaboratively be working on around 20 projects that seek to address the opportunities of the Internet economy, focusing particularly on the fundamentals of online auctions.

As Prof. Yossi Matias, Managing Director of Google's R&D Center in Israel says, The field of Electronic Auctions and Markets has grown tremendously over the past decade, and has become a significant factor in the Internet industry and economy.

Online systems (such as Google's AdWords) use a computerized auction where advertisers determine how much they are willing to pay; other relevant signals then contribute to an algorithm determining the online selection and rank of a particular ad. These involve complex computation, resulting in increased relevance and effectiveness of ads.

Such auctions in the Internet economy have previously been created within the industry itself, but there is now a growing realization that academic research in algorithmic game theory and algorithmic mechanism design may be able to provide insights to improve online advertising auctions and create more opportunity for advertisers, users, and the online economy at large.

At the same time, these technology transfer companies - which essentially work to initiate, promote and commercialize innovative technologies developed in the University laboratories and protect their intellectual property - could also benefit greatly from insights learned from the practice of the new industry.

The cluster of projects supported by Google will try to address basic questions involving the industry - such as the economic effects of viral networking, the dynamics of electronic markets, and new formats of selling advertisements, which could be beneficial to the user and the advertisers.  The projects will be executed by experts in many fields, ranging from computer science, statistics and game theory, through artificial intelligence and optimization, to economy and social sciences.