San Francisco — Black Friday sale is a few days away but, web search behemoth Google Inc. is continuing its late-year spending spree, on Monday announced that it is buying Silicon Valley display advertising technology startup Teracent, which expands its competition with display leader Yahoo Inc.
“Teracent’s technology can select and adopt from literally thousands of creative elements of a display ad in real-time — tweaking images, products, messages or colors,” Google said in a blog post. “These components can be optimized depending on factors like geographic location, language, the content of the website, the time of day or the past performance of different ads.”
Online advertising is separated into search — normally text ads associated with content on a Website — and display, such as banner ads that are often used as marking tools by corporations.
Teracent’s technology produces graphic advertisements according to who is viewing them, so that a retailer’s nearest store could become part of an ad, for example, or new products could be swapped into a company’s standard ad with minimal effort. Ads can also be changed based on the time of day and a person’s language, the company said.
The San Mateo, Calif.-based startup has built-up machine-learning algorithms that combines different components of an advertising creative to serve, in real time, tailored ads that boast far greater relevance than the traditional, one-size-fits-all banner ad.
“We think that this technology has extraordinary potential to improve display advertising on the Web,” Google Vice President Neal Mohan and Engineering Director Joerg Heilig wrote in a blog post announcing the deal.
Google assured advertisers better results from their display ad campaigns, which will let publishers make more money from their ad space and provide users with more useful ads. The search giant showed an ad for a Home Hardware store, which — when linked with Teracent technology — can show more detailed information, like specials on exact products, photos of those products, and location information.
“As you know, we have been busy releasing new features and products to help improve display advertising on the web for everyone. We believe that Teracent’s technology fits neatly into these efforts,” Google said, pointing to things like its DoubleClick Ad Exchange and Google Campaign Insights.
Google says the one on the right was created with Teracent’s technology.
“The infrastructure, opportunities and technical extent that Google will provide for Teracent customers means a future of product innovation for Teracent’s dynamic ad optimization platform,” Teracent says in their own announcement.
The acquisition suitably fits into Google’s plans to bundle up its presence in display advertising, a market led by Yahoo, and crowded with other online heavyweights such as AOL and Microsoft.
Yahoo is the first-rate display advertiser, with 14.5 percent market share in September, according to comScore. Google appeared sixth at just 2.2 percent, although the statistics do not include display ads that the companies sell through ad networks or exchanges.
In October, Google CEO Eric Schmidt stated that Google would be more actively going after smaller acquisitions throughout the year. Several weeks later, Google, earlier this month acquired mobile display advertising firm AdMob for an undisclosed amount. And few days later, the company confirmed that it had also purchased Internet calling company Gizmo5.
In September, Google also acquired CAPTCHA technology in an effort to improve the quality of its book-scanning project.
Financial terms and conditions of the deal is not yet disclosed, but Google said it expects the Teracent deal to close before the end of the year.