Display ads could well comprise about 4% of Google's sales in 2010, according to the report, which would be a 40% increase from a year ago.
Google's progress comes at a time when demand for display ads could grow more briskly in 2010 than for search-related ads, the report said. After all, display ads are frequently a cheaper alternative to TV ads, and provide advertisers the opportunity to expand their presence on the Web.
Google has, in part, helped grow its display ad business and catch up with Yahoo!'s (YHOO - Get Report) display ad sales through acquisitions, including its $1.65 billion purchase of YouTube in 2005 and its $3.1 billion purchase of DoubleClick in 2007. Yahoo!'s $6.5 billion revenue in 2009 was largely derived from its display ads.This year, display ads are expected to generate $7.9 billion, up 8.2% from 2009. Google stock has gained 1% to $538.50 in morning trading, while Yahoo! has increased 0.6% to $15.10. Meanwhile, related stocks have also advanced. Sohu (SOHU - Get Report) is up 0.8% to $49.10, while AOL (AOL - Get Report) has risen 1.2% to $23.90. -- Reported by Andrea Tse in New York >>See our new stock quote page. Follow TheStreet.com on Twitter and become a fan on Facebook.