An improved system and method is provided for optimizing the reserve price and allocation of web page placements in an online keyword auction using generalized trade reduction. To do so, a generalized trade reduction engine may be provided to convert an implementation of an online keyword auction into a double-sided auction that may optimize the reserve price and allocation of web page placements to maximize revenue. An online keyword auction may be converted into a double-sided market by turning every bidder in the auction into a buyer and every web page placement into a virtual seller. The allocation of buyers and sellers may be divided into disjoint procurement sets and the generalized trade reduction engine may add or remove procurement sets in iterations until conditions of competition among remaining traders may be fulfilled to optimize the reserve price and allocation of web page placements to maximize revenue.