June 14, 2011, 11:24 AM

Google to buy an online display advertising firm

Admeld helps online advertisers connect with advertising networks.

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Google Inc. says it will buy Admeld, an online display advertising firm that was founded in 2007. Google did not say how much it will pay for the company but reports put the amount at $400 million.  Admeld helps online advertisers connect with advertising networks and platforms.

“Providing better ad management services to publishers is an area that has seen a huge amount of investment in recent months,” says Neal Mohan, Google’s vice president of display advertising. “By combining Admeld’s services, expertise and technology with Google’s offerings, we’re investing in what we hope will be an improved era of flexible ad management tools for major publishers.”

In a speech given last week at a conference operated by the Interactive Advertising Bureau, a trade group, Mohan predicted that engagement rates for display ads will increase 50% by 2015 even as display ad impressions decline by 25% per consumer. “Today, people are bombarded by online ads, but they don’t connect with most of these ads in a meaningful way. I believe the trend will be for people to ultimately see fewer, but better ads,” he says.

He adds that display advertising will represent a $200 billion industry by 2015. In a recent report, research firm eMarketer projects online display ad spend will reach $12.3 billion this year, up 24% from $9.9 billion in 2010.

“Though we have no specific integration plans yet, we imagine our combined offerings can help publishers make more informed, efficient, and profitable decisions across all tiers of their inventory,” says Michael Barrett, Admeld’s CEO. He says the deal still needs regulatory approval.

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