Google Looks to Teracent for Display Advertising

By Dena Cassella November 23, 2009

biggoogle — Image used with permission by copyright holder

Google Inc. has snapped up another startup in its quest to sell more visual advertising on the Web.

The acquisition of Teracent Corp., a 3-year-old startup, provides Google with more tools for customizing the online billboards known as display advertising.

Selling more display advertising is a high priority for Google, which makes most of its money from short text messages posted alongside search results and other Web content.

Google started the expansion into display advertising last year after completing its $3.2 billion acquisition of the online ad service DoubleClick. The push poses a threat to Yahoo Inc., which is the Internet’s biggest seller of display ads.

Teracent’s technology automatically tweaks the look of an ad so the images are more likely to grab the targeted audience. The changes are based on factors such as a Web page’s content, the time of day and the user’s location.

Google didn’t disclose the financial terms of the deal, which was announced Monday.

Google’s dominance of the more lucrative Internet search market has left it with plenty of money to mount its challenge in display advertising. The company ended September with about $22 billion in cash.

Convinced the economy is on the improving, Google’s management is back on the acquisition prowl. The company is in the process of buying AdMob, a startup specializing in ads for mobile devices, for $750 million.

Teracent, which is based in San Mateo, Calif., was started in 2006 by Vikas Jha, a former engineer at one-time Google rival Inktomi.

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