Please ensure Javascript is enabled for purposes of website accessibility

Google Eyes a Bigger Ad Slice

By Anders Bylund – Updated Nov 11, 2016 at 6:30PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The search king takes a bite of the display-ad market.

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.

Further Foolishness:

None

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Alphabet Inc. Stock Quote
Alphabet Inc.
GOOGL
$98.74 (-1.40%) $-1.40
Microsoft Corporation Stock Quote
Microsoft Corporation
MSFT
$237.92 (-1.27%) $-3.06

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
339%
 
S&P 500 Returns
109%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/24/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.