Google Rolls Video Ads

Video is red hot with advertisers.
Publish date:

Another day, another


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Tuesday's announcement via reports in

The New York Times


Wall Street Journal

is that the Mountain View, Calif.-based company has begun testing the sale of video ads on sites where it already sells graphical and text-based ads.

The top search engine also is considering selling ads on its flagship

site and other destinations it runs, according the


. A Google rep couldn't immediately be reached for comment.

Like most Google experiments, the video-ad announcement attracted media interest but was ignored by Wall Street. Shares of the Mountain, View, Calif.-based company rose $2.60 to $373.55. Tech pundits such as Michael Arrington of the blog

TechCrunch were skeptical.

"Perhaps their early testing showed that consumers don't want to click on these nearly as often as significantly less intrusive text ads," he writes. "Or perhaps Google just doesn't want to sully its super-clean site with this stuff. Either way, without Google search, advertisers will be significantly less interested in the product."

Google is trying to attract more brand advertising dollars as demand for search begins to mature. That's why it began selling ads on behalf of some magazine publishers last year and acquired dMarc Broadcasting, a firm that places radio spots, in January.

Neither initiative has proved to be hugely lucrative, and it's not clear whether publishers will be interested in doing business with Google for video ads.

Video is one of the hottest areas of the Internet. Advertisers are willing to pay premium prices for inventory, which has been sold on popular Web sites.

Investors are looking for the next big thing from Google before they are wiling to bid up the shares to the $500 level that Wall Street analysts say they are worth. Worries about Google's growth and increased competition from


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continue to weigh down the shares.

"It's mathematically true that our growth rates will eventually slow," said Chief Executive Eric Schmidt in an interview Monday with CNBC, adding that it isn't clear when that will happen.

Google makes the vast majority of its profits from search advertising. Most users aren't bothering to check out the plethora of new features that Google has recently introduced, such as financial news and a digital calendar.