Google Acquires Admeld

June 13, 2011

Google

Google is on its way of another major acquisition. It has acquired the display advertising company Admeld for $400 million. 

Admeld specializes in real-time bidding platform that helps online advertisers to sell display ads. The company boasts big companies as their clients including Fox News, Hearst Television, Weather Channel and Answers.com.

Katelin Todhunter-Gerberg, a Google spokesperson, said that the Mountain View, Calif., company does not “comment on rumor or speculation.” Admeld CEO Michael Barrett and chief revenue officer Benjamin Barokas did not return calls seeking comment.

The acquisition would be a “momentous step for Google,” said Karsten Weide, research VP of digital media and entertainment at market intelligence firm IDC.

“With the acquisition, [Google would offer] the complete value chain in the advertising ecosystem,” he said. Weide added that the acquisition would improve ROI for Google’s advertising customers because it “gives them easier access to relevant inventory,” as well as Admeld inventory that they otherwise wouldn’t be able to take advantage of.

In the first quarter of 2011, Google’s share of overall display advertising revenue increased to 14.7%, overtaking Yahoo as the market leader.

According to Weide, this acquisition will also increase the lead that Google has over its major competitors as none of them have this kind of access to relevant publisher inventory.

According to Wall Street Journal, Google and Admeld have been in talks about the acquisition since January. Previously Google offered $150 million, then $200 million, but looks like Admeld had a higher value to it and apparently Google agreed to pay as well.

Neal Mohan, VP of product management at Google, said June 9 that he expects ad spending to hit $200 billion in “a few short years” and emphasized the value of real-time bidding.

“Some of our case studies have shown that through things like data-driven, real-time buying, click-through rates have improved 135% and conversion rates have gone up 150%, and most importantly, cost-per-action is down 125%,” he said, speaking at the Interactive Advertising Bureau’s “The Future of Display” event.

Well, time will only tell how big Google can get with this acquisition, but for sure real time bidding is the next big thing in display advertisement.

 

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