With One Move, Google, Inc. Is Changing the Rules of a $17.7 Billion Market

Google (NASDAQ: GOOGL  ) (NASDAQ: GOOG  )  has begun selling magazine ads, but not in the manner you'd think. Fool contributor Tim Beyers explains the details in the following video.

In a blog post last week, AdSense Software Engineer Yuheng Kuang explained that Google wants to expand the options for advertisers who might be interested in your site. Magazine ads allow for advertisers to place text in space typically reserved for display ads.

Kang wrote:

If a text advertiser is the winning bidder for your ad unit, their ad will appear in the magazine ad format. This format has been designed with print magazine ads in mind, putting a big emphasis on space and typography and displaying a new look distinctive from our regular text ads.

Strategically, the move allows Google to get display ad prices for text ads, which should help offset pressure elsewhere. (Cost-per-click -- a measure of the premium Google charges for ads -- has declined in recent quarters.)

There's also a broader shift under way here. With magazine ads, Google introduces a way to win against Facebook (NASDAQ: FB  ) while Yahoo! steps back from the $17.7 billion digital display ad market to focus on contextual "stream" ads. Occupying that niche should bring benefits for Google shareholders, Tim argues.

Now it's your turn to weigh in. Do you think Google's magazine ads strategy will pay off? Why or why not? Please watch the video to get the full story and then leave a comment to let us know your take, including whether you would buy, sell, or short Google stock at current prices.

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