Google has been serving display ads on other sites for years, and the DoubleClick acquisition will accelerate that effort. Third-party display ads will only make a small contribution to the bottom line, however (10-20 cents on the dollar). So the key question here has been whether Google would deign to put display ads on its own sites.
We've argued that a full load of display ads on Google.com could add $3-$4 billion in annual revenue. Many SAI readers considered this estimate too optimistic, and it might be, at least over the next couple of years. But $1-$2 billion seems easily achievable.
Most importantly, Google itself is now talking explicitly about display ads on Google.com. It will start small--placing display ads on, for example, image search results. But we imagine that display ads will gradually spread throughout Google.com over the next few years.More>>