• Business Week, Tuesday, May 1, 2007 10:31 AM

Display networks are the new online video-for now. Now that Yahoo has all of Right Media and Google is on the verge of scoring DoubleClick, everyone's waiting for the next big move. Microsoft is now said to be after ValueClick Media, one of the Web's largest ad networks, along with 24/7 Real Media and aQuantive, owner of the ad-server AtlasDMT.

Why ad nets? According to eMarketer senior analyst David Hallerman, display ads are on course to reach $5.5 billion this year. That's about $3 billion less than the market search-related text ads. And when you consider that search accounted for just 1.3% of the total online ad pie seven years ago (nowadays it's roughly half), while display brought in 47%, you might think this is a market in decline.

Not so. Broadband connections and richer content mean people are spending more time with their computers. This means that ad networks, which pool together groups of publishers to sell to advertisers, are ready for prime-time--especially auction-based exchange providers like Right Media, which let advertisers bid against each other to buy targeted audiences across the Web. They want to do to display what Google did for search. If you're a Web giant that owns a search engine, why not buy a network and merge user data into a package to sell to advertisers at market-set prices that will grow?

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