Google has reported that a full-blown introduction of display ads on their site could generate $3-4 billion in yearly revenue, based on the revenues of other sites like Yahoo and AOL from their ads.

With Google’s stock price slipping a bit from its lofty heights, Marissa Mayer today gave the first indication Google may be planning on phasing in display ads in the very near future, starting with ads on image search.

Monetizing image search has been a problem for Google. Users don’t respond well to text based ads in image search, but display ads may make more sense. Users are already looking a bunch of pictures anyway.

This would represent a logical first step in Google beginning to fully monetize their juggernaut. However, it makes sense that they start very slowly and don’t do anything to jeopardize their dominance, especially in American search. The fairly pristine nature of google.com is one of its greatest attributes, but it leaves a lot of very valuable real estate that could represent a revenue bonanza if utilized.

Mayer, speaking to Bloomberg, noted, “DoubleClick’s strength in display advertising and their work in brand advertising we think ultimately may mean we’ll have a better set of options in terms of image ads to run on image search.”

Thanks to Henry Blodget at Silicon Alley Insider for the story.

This entry was posted on Friday, May 9th, 2008 at 9:50 amand is filed under Search Engine Marketing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.