Blow for Yahoo? Strike on Bing? Google Acquires Teracent for Targeted Display Ad Technology
Internet giant Google announced today on buying Teracent, an American startup company which specializes in display advertising. This is another step in Google’s waged war on the control of the advertising market, with the arch rival Yahoo and newly sworn enemy Bing by Microsoft. Unfortunately, the financial terms are undisclosed and haven’t been revealed yet. Google whose income comes mainly from textual advertising which is search related, intends to maneuver the purchase in order to base its status in the field of online graphical targeted advertising. This announcement underscores Google’s plans to double down in display advertisement.
A New Age For Interactive Ads?
This is no surprise, last year Google completed purchasing the online advertising company Double Click, which also deals with display advertising for 3.2$ billion. Google’s CEO, Eric Schmidt claimed on September that Google plans to return to making purchases, after a minor pause, or setback if you wish, due to the global financial crisis. At the time, he also said that Google wishes to “buy a company a month” (on average). It seems Google is keen on fulfilling its chairman’s announcement: under-less than two weeks ago, Google bought AdMob, which provides solutions for cellular marketing for 750$ million in shares in a deal which is meant to sweep the cellular advertising market.
Teracent was founded by Vikas Jha, former vice president of Inktomi, a software company which was acquired by Yahoo. Teracent, the California based company runs software that lets private advertisers, agencies and ad networks to deliver multiple versions of ads to different users across the Web and on mobile phones. It is triggered by certain information that can be determined on the user from the web such as location, gender, income and interests. A fashion giant like Lacoste or Calvin Klein would be able to use Teracent’s technology to advertise a promo for its winter collection for Vancouver viewers, while users from Sunny San Diego might see new summer accessories.
This concept is nothing new, many competitors such as Tumri and Dapper have been behaviorally targeting viewers so they can promote customized ads. The only difference is that Google is going to use the software to automate display ads in the same manner it did with search ads, trying to make web display ads relevant more than ever for both advertisers and consumers. This move means that the entire search industry could be shifting to display ads. It’s also a slap in the face of Yahoo who previously partnered with Teracent for some business ventures. Up to now, Yahoo has surpassed Google in display ads.
In conclusion, the move comes as a blow to Yahoo, which may have to end the aforementioned partnership with Teracent, but it’s a big win for the marketers, which will be able to create interactive ads that will customize themselves just like search ads do, hitting the iron when it’s hot. Just so you know, last year, the popular Internet search engine had an income of 22$ billion, I suggest keeping an eye on the next year’s income.
More from The CEO Game on Google: Google’s investment in the EBM, and Google Planet.
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November 24th, 2009 at 4:30 pm
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This post was mentioned on Reddit by torpico: Maybe you are correct.. but it’s a big blow for yahoo- google practically snatched Teracent from yahoo.. I am sure yahoo is going to react is just a matter of time.. I just don’t know how…
November 25th, 2009 at 8:52 am
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November 25th, 2009 at 9:46 am
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April 6th, 2010 at 2:26 pm
[...] Google completed purchasing the online advertising company AdMob for 750$ million in shares and Teracent for targeted display ad technology. This year, Google already bought On2 for 106.5$ million and [...]