Google hoping history repeats itself with display ads

With a new display ad exchange developed by its DoubleClick subsidiary, Google is hoping to give its one-trick pony another act.

Google has turned into one of the Internet’s largest and most influential companies on the popularity of its search engine and the profitable text ads it sells alongside those search results. This business generates the vast majority of its revenue and profits and gives Google the resources to tackle a variety of other projects from Google Apps to Chrome OS to Google Books.

But like just about anything, that business can only grow so fast. Google will need another profitable, growing business to maintain its spot atop the Internet world, hence the motivation for its $3.1 billion purchase of DoubleClick a year ago and the launch of the DoubleClick Ad Exchange Friday.

The DoubleClick Ad Exchange is sort of like a stock exchange, where buyers and sellers meet to haggle over prices for display ads, such as banner ads or video ads. Companies that sign up to participate in the exchange can search for open spaces in which to place their ads and bid on that space just like Google’s text-ad auction system for search keywords. It will also plug into Google’s existing infrastructure for AdWords–ads sold on Google search results pages–as well as AdSense–ads hosted by Google but displayed on third-party Web sites, giving those customers another option for their marketing campaigns.

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