Google drops video ad system

02 April 2009

MOUNTAIN VIEW: Google, the online search company, is removing a feature on its AdSense system that enabled advertisers and publishers to display videos, and content from YouTube, on affiliated websites, having also abandoned its radio and print ads programmes earlier this year.

The company has exerted a profound influence on the advertising industry, but has also been dubbed a "frenemy" for its mixed impact on agencies.

From the end of April, the search giant will no longer offer clients the option to put video ads on web pages via AdSense, a move largely attributed to a lack of take-up of the system by its potential users.

A similar rationale was given to explain the shutting down of its Audio Ads and Print Ads programmes, and each of these closures is seen as part of a broader rationalisation of Google's advertising operations.

However, Richard Fetyko, an analyst at Merriman Curhan Ford, has upgraded Google's shares to "buy" based on a recent "improvement in search ad spending and pricing."

Following a weak first two months of the year, Fetyko argued the market will improve in March, and suggested the online giant is well placed in the mobile search market.

The Mountain View-based firm is also set to launch a new venture capital fund, Google Ventures, which will have a budget of $100 million (€75.5m; £69.7m) in its first year of operation.

Rich Miner, a managing partner of the new unit, said it aims to "follow the best practices of a top-tier venture capital firm, but to do that inside Google, where we can leverage Google's lens on what's interesting."

Data sourced from Washington Post/Wall Street Journal/The Street; additional content by WARC staff