Google Might Dominate Display With Admeld in Pocket

Inplace #2

ADOTAS – Google has made it well known for a while that it aims to rule the online display space, which Chairman and former CEO Eric Schmidt said could reach revenue heights of $200 billion (up from the $50 billion estimate Google’s display team hit me with last year). The company seemed well on its way as the Google Display Network stole the display revenue crown from Yahoo! for the first quarter of 2011.

But now the wire is exploding with news that Google is finalizing a $400 million acquisition of revenue optimizer Admeld. Just a couple of months ago it disseminated through the ranks that revenue optimizer AdMeld passed on an acquisition offer from Google because the $200 million price tag was too low. How nice of Google to double the asking price.

If this deal goes through, it will be hard to imagine anyone being able to compete with Google in the display space. Big G will have its fingerprints on an unbelievable amount of display transactions from both the supply and demand sides.

In addition to optimizing publisher revenue by enabling participation in real-time bidding on various exchanges such as Google’s DoubleClick Ad Exchange and Yahoo!’s Right Media Exchange, Admeld has been providing the technology behind and powering the private ad exchanges of The Weather Channel, IDG and quadrantONE (a partnership between journalism depots The New York Times Company, Hearst, Tribune and Gannett).

An acquisition would allow Google to take over this business and sell the technology to other major publishers. In addition AdSense partners and DoubleClick for Publishers clients would get hooked up with Admeld’s optimization tech.

Those wary of the deal (including regulators who will definitely give it a long hard look) will be skeptical of Google favoring its own exchange in display transactions, but honestly Big G won’t have to in order to bring home serious revenue. There’s plenty of money to be made by optimizing the supply side.

Admeld competitors PubMatic and Rubicon Project are hoping publishers will be suspect of Google’s intentions and choose to work with an independent revenue optimizer instead. True to form, Rubicon CEO Frank Addante sent out a statement offering existing AdMeld customers 90 days of free service.