Google to buy display ad company AdMeld

Reuters News
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Posted: Jun 14, 2011 1:24 AM

SAN FRANCISCO (Reuters) - Google Inc plans to buy online advertising company AdMeld to grab a larger slice of the market for graphical display ads.

It is the latest deal in Google's buying spree of technology and engineering talent to bolster initiatives outside its Internet search business, from social networking to mobile advertising.

Google did not disclose the financial terms of the deal, although TechCrunch reported last week that Google paid roughly $400 million, citing anonymous sources.

Shares of Google were down 1 percent at $503.31 in midday Nasdaq trading on Monday.

New York-based AdMeld provides "yield management" technology, which allows Web publishers to instantly sell display ads, as Web surfers visit different pages on a site.

Several companies offer different pieces of the puzzle that allow instant bidding for ads, including advertising exchanges such as Google's DoubleClick and Yahoo Inc's Right Media.

The display advertising will eventually become a $200 billion industry, Google Vice President of Display Advertising Neal Mohan said on his blog last week.

Google and AdMeld will remain independent companies while the transaction undergoes regulatory review, AdMeld said in a post about the deal on its Web site on Monday. AdMeld said it entered into the agreement with Google over the weekend.

The vast majority of Google's revenue, which totaled roughly $29 billion in 2010, comes from small ads that appear alongside its search results. But the company has stepped up efforts to tap into the market for online display ads that feature images and videos.

In October, Google said its display advertising business was generating revenue at an annualized run rate of $2.5 billion.

(Reporting by Alexei Oreskovic; Editing by Derek Caney)