Google investing for growth in display ads

SAN FRANCISCO Tue Dec 15, 2009 3:23pm EST

An employee answers phone calls at the switchboard of the Google office in Zurich August 18, 2009. REUTERS/Christian Hartmann

An employee answers phone calls at the switchboard of the Google office in Zurich August 18, 2009.

Credit: Reuters/Christian Hartmann

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SAN FRANCISCO (Reuters) - Google Inc executives said the company experienced very strong growth in its display advertising business in the first three quarters of the year and it will continue to invest heavily in advertising initiatives involving online video and mobile Web devices.

Speaking to investors and analysts during a webcast on Tuesday, the Internet search giant outlined the various elements of its efforts to increase its ad revenue from display ads such as graphical images, videos and interactive Web animations.

Google's Tom Pickett, director of online sales and operations, said the company sold out 90 percent of the ad inventory for the homepage of YouTube, Google's video website, in the third quarter.

Google, the world's No. 1 Internet search engine, did not provide financial updates for the current quarter.

Google has made a number of recent acquisitions to bolster its business selling display ads as it supplements its revenue from the text ads that appear alongside its search results.

The company bought ad serving company DoubleClick for $3.1 billion in 2008. Last month, Google announced plans to pay $750 million to acquire AdMob, which makes technology to serve ads in the applications popular on smartphones like Apple Inc's iPhone.

Google does not disclose how much of its revenue, which totaled about $22 billion in 2008, comes from display ads.

Executives said on Tuesday that efforts to convince large, brand advertisers to spend money on online display campaigns were gaining momentum. And new Google products, such as a tool that allows advertisers to create their own display ads, were enticing smaller advertisers to experiment with display ad campaigns.

(Reporting by Alexei Oreskovic, editing by Maureen Bavdek)

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