Patent ID: 7974880

Claim:
A system for updating a bid for an advertisement of an advertiser, the system comprising: at least one computer comprising: a query engine configured to receive a query from a user, the query engine being configured to request a text search based on the query; and an advertisement engine in communication with the query engine and configured to receive an advertisement query, the advertisement engine comprising a query processing module configured to select an advertisement position for the advertisement based on a bid stored in a bid database; a bid update module configured generate a suggested bid and automatically update a current bid in the bid database based on the suggested bid, wherein the bid update module is configured to determine a maximum profit position for the advertisement and generate the suggested bid based on an envy free point for the maximum profit position, wherein the bid update module is configured to determine the envy free point based on a value per click, a cost per click for the maximum profit position and a click through rate for the profit maximizing the maximum profit position, where the envy free point is a level where the advertiser would have at least a same or better profit if the bid were underbid by another advertiser in a position above the maximum profit position; wherein the envy free point is calculated based on a first difference between the value per click and a quantity, where the quantity includes a second difference between the value per click and the cost per click for the maximum profit position where the second difference is multiplied by a ratio of the click through rate for the maximum profit position to a click through rate for a position directly above the maximum profit position.