Google's buying spree displays results

A six-year acquisition spree aimed at making Google a force in the display advertising business is finally paying off.

The deals have brought strong positions in different corners of the display world, from video and mobile to its third-party ad network. According to one senior advertising agency executive, though, Google's rise is based on more than just the sum of these parts. More News From Financial Times
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Diversification benefits Balfour Beatty "All the pieces of their business are meshing," thanks to some heavy investment in support, this executive said. That includes educating advertisers about how to use its combined display advertising services to best effect, while also making available the application programming interfaces for agencies to tap easily into the new online markets it has built. The search company is now set to overtake Facebook this year to become the leader in online display in the US, just a year after Facebook itself vaulted past Yahoo, according to research group eMarketer. Google's expected $6bn of display revenues in 2012 will also make it the global market leader, according to Mark Mahaney, internet analyst at Citigroup. The deals that have put Google on the map began with the USD 1.65bn purchase of YouTube in 2006, which has taken years to show meaningful results. The video site is on track to pull in USD 3bn in revenues this year, according to Citigroup. A second key acquisition came with the USD 3.1bn purchase of DoubleClick in 2008, bringing Google a network that serves adverts on sites across the web. The company has benefited from consolidation in this business as advertisers have been drawn to companies that aggregate the most data about online audiences, giving them the ability to reach highly targeted groups of people across different websites, says Brian Wieser, an analyst at Pivotal Research. The DoubleClick deal also supplied the foundations for an advertising exchange which has gathered momentum as publishers have found it an attractive way to shift unsold inventory. The purchase of Admob, a mobile advertising company acquired two years ago, has also made Google the leader in this market, though it remains a small part of display overall.