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Google’s Display Business Booms, But It’s Complicated

Google long ago stopped being a one-trick pony dependent on selling search ads. But having two big advertising businesses—first search, now display—isn’t enough to stop the company’s growth from slowing.

Google’s display advertising business is growing much faster than search ads, reaching $10 billion in revenue in 2014, or around 15 percent of total revenue, according to two people briefed on the number, which has not been reported before. That’s up from around $5 billion in 2012, based on a disclosed projection by CEO Larry Page at the start of that year. The figure includes Google’s DoubleClick Ad Exchange, which hit $1 billion in revenue last year in the Americas, said one person familiar with the number.

Those are big numbers. And taken together, Google’s display business, which includes the sale of both graphical and video ads, represents 80 percent of the total revenue generated by Facebook, the leader in display-ad sales. But the display ad world remains fragmented among many different players. And despite good execution by some of the display ad units at Google, the category won’t be a rocket ship for Google the way search was.

Internal differences between senior executives about how best to expand the display business have complicated Google’s prospects, as much as competition from other companies.

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DoubleClick has sought to use data that Google has on more than a billion people that frequent Google sites in order to help advertisers target ads to those people on non-Google sites. Such requests have always been rebuffed.