Amazon has decided to make some changes to its Associates program, no longer allowing third parties to bid on keywords that would send visitors straight to Amazon websites where they’d earn a referral fee for each purchase.

The change only applies to the Associates programs in North America, and the company is referring Associates based outside the U.S. and Canada to check their respective terms and conditions agreements.

As of May 1, 2009, Associates will not be paid referral fees for paid search traffic. Also, in connection with this change, as of May 1, 2009, Amazon will no longer make data feeds available to Associates for the purpose of sending users to the Amazon websites in the US or Canada via paid search.

Amazon is not very communicative about the reasoning behind the decision, and the FAQ on its website only cites that it is based on ‘their review of how they invest their advertising resources’.

I concur with blogger Gee that paying out these referral fees is probably costing Amazon a lot of money, which is not necessarily a reason to block Associates from using paid search as a way to bring in traffic during normal times, but likely hurts the bottom line in the economic turmoil we’re in now too much to justify continuing to allow it. If that is true, that would mean that in this case paid search underperforms contextual links when it comes to sales referrals.