Focusing on Growth in Ad Display Market

Google (NASDAQ: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 (NASDAQ:YHOO) and AOL (NYSE:AOL)

Google's Position in Display Advertisement Market

Google recently overtook Yahoo (NASDAQ:YHOO) to claim the number one 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 like Google AdSense program, YouTube, Gmail, Orkut, etc. According to eMarketer, although present the U.S. display ad market is smaller than search ad market currently, it should overtake the search ad market by 2015.

Google Aspires to Dominate Display Ad Market

Google depends heavily on search advertising business and hence would ideally want to diversify its business 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 no where near dominant levels and offers plenty of room for upside.