While Google is sitting pretty at $29 billion in annual revenue, the vast majority still comes from simple text ads that appear alongside its on the Google search page. And, they company is still in third place for display advertising. That's about to change, though, with Google aiming to expand their display ad sector to over $20 billion in value.
Speaking to a small group of reporters on the sidelines of the Cannes Lions advertising festival, Google's EC Eric Schmidt said the group would continue to snap up companies that specialised in handling display ads such as banners and video.
"It would be good to have more diversified revenue," Schmidt said, just days after Google announced plans to buy AdMeld to grab a larger slice of the market for graphical display ads.
In discussing the company's current position in the display ad market, Schmidt stated, "I would argue that we're doing really well there. We started off with largely text ads, and now we have this display business which is going to end up being a $10 billion, $20 billion kind of business. It will be very large."
According to some analysts Google needs to diversify its business with products such as social networking tools to prevent advertisers moving over to the social network Facebook instead.
And the eMarketer's report earlier this week revealed that, Facebook will displace Yahoo to take the biggest slice of online display ad dollars in 2011. With that in mind, Google has engaged in a buying spree of technology and engineering talent to bolster initiatives outside of the search business, including in mobile advertising.
Schmidt said the display business had taken time to develop but said it would now look to make further acquisitions as publishers and advertisers helped it to understand which new services were required.
"There's not a list of targeted acquisitions," he said. "As the strategy develops it will become clear what the customer needs that we have not been able to build ourselves."