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Google Says New Multimedia Ads Are Starting To Click

Bloomberg News

Published: October 19, 2007

Google, owner of the world's most popular Internet search engine, said customers are starting to use its new multimedia advertising formats at a faster rate than expected.

Google introduced video ads on its YouTube site in August and this month started letting Web sites run YouTube videos and related ads alongside articles.

The Mountain View, Calif.-based company also began selling so-called gadget ads, which broadcast live news and showed movie previews.

'We're surprised at the number of people willing to experiment with these new formats,' Vice President Marissa Mayer said at the Web 2.0 Conference in San Francisco. 'They ultimately will be very large businesses.'

After dominating the market for search, Google is looking for new ways to generate advertising revenue, which accounts for 99 percent of its more than $10 billion in annual sales.

The company in April agreed to buy DoubleClick for $3.1 billion to bolster sales of graphical display ads, following last year's $1.65 billion purchase of YouTube.

Google also is luring advertisers onto Web sites customized for mobile phones. In September, the company introduced its AdSense advertising software for handsets, adding to a set of products that includes maps and e-mail for wireless devices.

Another business in which Google plans to grow 'in the very near future' is in providing health information online, Mayer said.

The company is building software that will allow users to find health data and store personal records such as X-rays.

About two-thirds of health information that users look for on the Web begins with a search, Mayer said.

'There's a lot of health information that's being generated, and it's hard to keep track of,' she said.

Google plans to let people store it 'in one centralized place, so it's portable,' Mayer said. 'You as the user have control over it. You can bring it with you to different doctors.'

This week, Google lost an ad contract with online health information provider WebMD Corp. to Sunnyvale, Calif.-based rival Yahoo. Yahoo will sell ads next to search results on the WebMD site and give New York-based WebMD's advertisers the ability to 'follow' users and continue to show promotions when they go to Yahoo sites.

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