Google Eyes a Bigger Ad Slice

On Monday, Google (Nasdaq: GOOG  ) opened up its AdSense system to third-party "advertising tags." While casual observers may shrug, this change could bring fresh revenue into Big G's bank accounts.

How now, brown cow?
Let's cover the basics. The AdWords network can now carry display ads from approved advertising networks, and webmasters can track and manage these ads with tools from the approved providers. This creates a more comprehensive advertising service from Google, which might help move the needle on the company's top line.

Google is the runaway market leader in text-based search advertising, with a 77% North American market share in 2007, according to Efficient Frontier. But that still leaves another 23% of untouched pie, and hungry Google would love a bigger slice. This move will clearly help, and it'll also make the most out of Google's $3.1 billion DoubleClick acquisition.

The rain in Spain
It's not a grab for total monopoly, though. A few major ad networks are missing from the list of certified compatibility, including the two next-largest options run by Microsoft (Nasdaq: MSFT  ) and Yahoo! (Nasdaq: YHOO  ) . Perhaps that's a consciously competitive decision on Google's part, to keep the rivals at arm's length. That seems to be the most popular explanation at the moment.

More in tune with Google's raison d'etre, there could be a handful of Googly engineers hard at work on those integration programs behind the scenes. Or perhaps the onus is on Mr Softy and the Yahooligans, who might not feel like getting their ad services too close to the big kahuna.

None of that really matters, though. The upshot is that Google's AdWords network now allows webmasters greater flexibility and more tools, both of which should boost its fortunes. I have no doubt that this open initiative will bear fruit; we'll see in a quarter or two just how rich and juicy that fruit is.

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Fool contributor Anders Bylund is a Google shareholder who holds no other position in any of the companies discussed here. You can check out Anders' holdings if you like, and Foolish disclosure thrusts its fists against the posts and still insists it sees the ghosts.

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