Google (GOOG) recently acquired Admeld in order to provide better display online advertisement management services to publishers and advertisers. Admeld’s technology is expected to be incorporated into Google’s display ad network called DoubleClick Ad Exchange, and this acquisition could help Google to drive its display ad business and fend off Yahoo (YHOO) and AOL (AOL).
Google recently overtook Yahoo to claim the No. 1 spot in the U.S. display advertising market with a share of around 15%. Google derives its display advertising revenues from a number of sources including Google AdSense program, YouTube, Gmail, Orkut, etc. According to eMarketer, although the U.S. display ad market is smaller than search ad market currently, it should overtake the search ad market by 2015.
Google depends heavily on its search advertising business and thus would ideally want to diversify by increasing its presence in the display ad market. Google dominates the global search ad market with about 68% market share by our estimates. Although it now leads the U.S. display ad market, its market share of 15% is nowhere near dominant levels and offers plenty of room for growth.
Google has done some high profile acquisitions in the past for enhancing its display ad business, which includes DoubleClick and AdMob. The Admeld acquisition is one more step in beefing up this promising business.
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