by Michael Liedtke
June 13, 2011
SAN FRANCISCO - Google has struck a deal to buy Admeld, a service that helps websites make more money from online advertising.
The agreement announced Monday positions Google to add another potentially valuable weapon to its advertising arsenal. Google already sells the most advertising on the Internet. The company's total ad revenue is expected to surpass $30 billion this year - greater than the entire newspaper industry.
For that reason, the proposed acquisition of Admeld may face more regulatory scrutiny than most deals of its size do.
Financial terms of the Admeld agreement weren't disclosed, an indication that Google isn't paying a high enough price for the proposed acquisition to be considered a major financial event.
Founded three years ago, privately held Admeld employs about 100 workers at its New York headquarters and other offices in San Francisco, London, Berlin and Toronto.
Admeld's service is focused on marketing campaigns that promote brands and typically feature imagery. The format is known as display advertising, an area where Google Inc. has been gaining market share since its $3.2 billion acquisition of DoubleClick Inc. in 2008.
The U.S. Federal Trade Commission spent a year examining the DoubleClick deal, still the largest acquisition in Google's 13-year history.
Google has been building its display advertising business to supplement its dominance of Internet search and the text-based ads that run alongside search results as well as other Web content.
The diversification has been working out so well that the research firm IDC said Google surpassed the Internet's long-time display advertising leader, Yahoo Inc., during the first three months of this year. IDC estimated Google held 14.7 percent of the U.S. online display ad market in the first quarter, followed by Yahoo at 12.3 percent and Facebook at 8.8 percent.
"Together with Admeld, we hope to make display advertising simpler, more efficient and more valuable," Neal Mohan, Google's vice president of display advertising, wrote in a Monday post on Google's blog.
Admeld works with websites to help them figure out how to make the most money from the amount of space they have available to show display ads. Its list of customers includes News Corp., IAC/InterActiveCorp., Thomson Reuters Corp. and Pandora Media Inc., which is preparing to go public this week.
Google didn't specify a timetable for closing the Admeld acquisition. The company's executives have repeatedly said they expect regulators around the world to take more time poring over how Google's acquisitions might affect competition on the Internet.
The intensified scrutiny hasn't curbed Google's appetite for acquisitions. Since the end of 2009, Google has spent more than $2.6 billion buying more than 60 companies.
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