June 13, 2006

Google Sales Chief Says Still Testing Display Ads

LAS VEGAS -- Web search leader Google Inc.'s global sales chief sidestepped questions on Tuesday over whether its foray into graphical display advertising has been a disappointment, saying the effort remains in testing mode.

"I think it's fair to say we have basically just started," said Sheryl Sandberg, Google's vice president of global online sales.

Sandberg was responding to a question from analyst Safa Rashtchy at the Piper Jaffray Global Internet Summit in Laguna Beach, California, about whether the company had gotten off to a slow start in its display ads business.

Her comments were Webcast on Google's investor relations Web site.

Google derives virtually all of its revenue from selling pay-per-click, text-based advertising as opposed to display advertising, such as banners on an Internet page, a market that rival Yahoo Inc. continues to dominate.

Over the past year, the company has been experimenting with inserting small image-based ads into results from Google searches.

Last month, it introduced a plan to offer "click to play" video advertising.

"When we think about display advertising, we think we are just beginning," Sandberg said.

Rashtchy asked Sandberg whether Google planned to offer ad services to cover "all media," including the broader world of traditional media outlets.

Sandberg declined to specify in which additional media formats Google was prepared to offer advertising.

"Our long-run vision is that we will be working with advertisers ... in lots of formats," she said.

"I don't think we know how we will do it," the Google executive said. "We don't believe we have to have the perfect answer before launch."

Sandberg declined to comment on Google's ad sales, citing the company's policy against commenting on its future financial outlook.

Google shares rose $1.46 to $383 in Nasdaq trading.