Technology
Could Display Advertising Put Another $2 Billion In Google's (GOOG) Pocket
Published:
Now that Google (GOOG) has a green light to buy ad serving firm DoubleClick, it is making a foray into display advertising. Currently the company makes almost all of its money off text links targeted to the content on its and its partners search results pages. This text advertising was worth almost $5 billion to Google last quarter.
Five years ago, no one would have given Google a chance to turn its search ad business into such a dominant presence. The question now is whether it can be as effective serving display ads by matching them to content or user behavior.
The three major portal companies, Yahoo! (YHOO), MSN (MSFT), and AOL (TWX) brought in over $10 billion in display advertising last year. The market is growing, although not as fast as the search-based business. It is possible that the display ad revenue for the portals could move up to $12 billion this year.
So, can Google take 15% of this market? Based on its current ability to put ads where people will view them, the answer is probably "yes".
That would add $2 billion to Google’s revenue, almost all of it at a high margin, and might suck more air out of the room occupied by companies like Yahoo!.
Douglas A. McIntyre
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