Thursday, May 8, 2008

Google to show ads in image-search and Youtube

Bloomberg reports Google is seeking new sources of revenue as growth slows for the four-line text ads that generate almost all of its sales. The Mountain View, California-based company's revenue grew 56 percent last year to $16.6 billion, down from 73 percent growth in 2006.

"We haven't found a proper way to monetize image search to date,'' said Mayer, who oversees search products. ``You may see us roll out an ads-image search in the future, but when we do you'll know that's because we found a way that ultimately enhances user happiness with the product.''

Google calculated in 2006 that it was giving up as much as $200 million a year by not including text advertisements with its image search results, and that figure has probably increased since, Mayer said. Trials showed that text ads drove people away from conducting image searches, and Google dropped that idea.

Display ads may work better with image searches because they seem more natural to people looking for pictures, Mayer said. While the company has done mock-ups of how it might present the ads, it hasn't tested them on users, she said.

CNET reports YouTube users soon will see some new advertisements around their online videos.

Google Chief Executive Eric Schmidt said the company is working on new ads for the video site in a meeting here with reporters before Google's shareholder meeting, but he was cagey with details.

"We have new ad products that are not pre-roll and post-roll," he said, referring to ads that show up before and after videos. "We have new approaches. Think of them as ads that are in the context of YouTube. They use the page around YouTube in interesting ways."

The new ads will launch "over the next few months," Schmidt added.

Schmidt has made no secret of his desire to make more money from YouTube, the dominant video site on the Internet; Google acquired YouTube for $1.65 billion. In an interview last week with CNBC, he said about YouTube, "We're working but have not yet in my view gotten a breakthrough around monetization...We're working on that. That's our highest priority this year."

Google is banking on the $3.1 billion acquisition DoubleClick. As they are not market leaders in Display advertising even doubleclick would like such reach among millions of users. This move will help youtube, image search and Doubleclick turn gold mine for g


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