Google exec: Social key to success in display ad business

The company will boost its efforts to bring social capabilities to its sites

Expect Google to deepen its efforts in social media and social networking as part of its broader push to increase its display ad business.

Google, whose revenue remains largely dependent on text-based pay-per-click search ads, has been trying for years to boost its sales of display ads, where it trails rivals like Yahoo, Microsoft and AOL.

It spent billions to acquire YouTube and DoubleClick largely to jump-start its display ad business, and while the company says those two acquisitions are yielding promising results, boosting social features will also be key, an executive said Wednesday.

"Social signals will be very relevant [to display ad sales] because the more signals you have about the ads, the better the ad will be targeted," said Henrique De Castro, Google's vice president of Global Media and Platforms, at the Bank of America Merrill Lynch Technology Conference in New York.

"So we're connecting more and more social networking or social indicator signals into our ad delivery," he added.

Social features will also be key in increasing traffic to sites carrying Google display ads, so the company wants to propagate social-networking capabilities popular on YouTube to those other properties.

"If you think about YouTube, it's one of the largest social networks," he said. "We need to bring social-networking capabilities to our properties, and that's what we're going to work on."

"Social is definitely an area we want to work on and explore," he added.

De Castro didn't provide further details on what Google is planning to do in this area.

Google has had a social-networking site called Orkut for years that is popular in certain countries, such as Brazil, but it doesn't come close to matching the global popularity of Facebook.

Google also has a platform for social technologies called Open Social that it makes available to developers who want to add social-networking capabilities to their sites or create social applications.

Google also recently added a social-networking component to its Gmail webmail service called Buzz that lets users post and share status updates in a similar way as people do on Facebook and Twitter.

ComScore recently reported that Facebook led all U.S. providers of display ads in the first quarter, nabbing 16.2 percent of the impressions and unseating former leader Yahoo, which got 12.1 percent of the total.

Microsoft finished third with a 5.5 percent share, followed by Fox Interactive Media, which includes MySpace, with 4.9 percent, AOL with 2.9 percent and Google in sixth place with 2.4 percent.

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Juan Carlos Perez

IDG News Service
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