TELECOM Digest OnLine - Sorted: Google Seeks to Broaden Ad Reach to More Companies

Google Seeks to Broaden Ad Reach to More Companies

Lisa Minter (
10 Feb 2005 14:04:49 -0800

By Lisa Baertlein

SAN FRANCISCO (Reuters) - Web search leader Google Inc. is focusing
investment on expanding advertising services and improving Internet
search, the Web search leader said on Wednesday at its first analyst
day as a public company.

Google Chief Executive Eric Schmidt said Google's current advertising
services are most popular with medium-sized companies and that it is
working on products to serve the largest and smallest advertisers.

Google's mid-market advertising business is highly automated and low

Very small advertisers are more likely to not have Web sites or be
unfamiliar with Internet search advertising that drives virtually all
of Google's revenue.

The company recently increased the number of people devoted to direct
sales and to helping large advertising customers track the performance
of their Web search ad dollars.

Omid Kordestani, Google's senior vice president of worldwide sales and
field operations, said the company is focusing on signing up more
local advertisers and beefing up tools that help advertisers better
target ads and measure their effectiveness.

He also said the company could do better in the Asia-Pacific region,
where it has just three advertising sales offices versus nine in
Europe and 12 in the United States.

Google competes with Yahoo Inc. for Web search advertising dollars
both in the U.S. and internationally.

New Web search entrant Microsoft Corp. has not said whether it will
build its own Web search advertising services. It currently partners
with Overture Services, Yahoo's Web search advertising provider.

In all, Google said it would put about 70 percent of its investment
toward its core Web search and advertising businesses.

Schmidt said the business side of the company is run in a traditional
way while the product development side is more creative.

"We're actually not as unconventional as we say we are," Schmidt said.

"We're in this to make money," said co-founder Larry Page, although he
added that Google will not try to drive revenue with each of its
products -- which range from local, news and image search to free
online e-mail and photo management services.

Google shares closed down 3.6 percent at $191.58 on the Nasdaq,
ahead of IPO-related lock-ups expirations that are slated to expire on
nearly 177 million shares early next week.

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