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Investors punished Google for the less-than-stellar second quarter results it reported on Thursday, sending the share price down about 10 percent to $482 in Friday trading. So what went wrong?

No one thing was responsible, but a few factors combined to make a 35 percent growth in net income to $1.25 billion look like bad news.

Interest income First, the company missed expectations: net income, excluding various items, was $4.63 per share, short of the $4.74 expected by analysts surveyed by Thomson Reuters, and that's usually enough to send the stock down in after-hours trading.

But … Read more

Russian Internet site Rambler Media has agreed to sell its advertising unit, ZAO Begun, to Google, and to use Google's technology for search and advertisements.

Rambler currently owns 50.1 percent of Begun, but will buy the remaining 49.9 percent from Bannatyne and then sell the entirety to Google for $140 million in cash, the company said Friday. Of that total, $69.9 million will go to Bannatyne, the company said. Rambler expects to end up with about $50 million from the deal, which it will use for investments and potential acquisitions.

The move marks an expansion of … Read more

Google CEO Eric Schmidt has spoken more than once this year about monetizing YouTube, but he showed some signs of patience on Thursday for finding a new, good way to sell ads on the video-sharing site. And when Google gets the mechanism right, Schmidt said he expects to hit the mother lode.

"There will be new monetization forms. That is what we are seeking. That is the holy grail," he said on a conference call after Google reported disappointing second-quarter earnings. "When we find it, it (monetization) is likely to be very large because of the scope … Read more

NebuAd has made few friends, thanks to a business built on monitoring broadband customers' Web surfing to deliver advertisements. It certainly found none on Capitol Hill on Thursday.

The Redwood City, Calif.-based start-up was forced on the defensive during a hearing in which politicians charged that deep packet inspection of Internet traffic was far too privacy-invasive. Only if customers gave affirmative consent by opting in, they said, might the practice be acceptable.

Texas Rep. Gene Green called NebuAd's opt-out procedures "contemptible." To Pennsylvania Rep. Mike Doyle, the practice "goes against everything the country's been … Read more

Google increased its share of money spent on search ads to 77.4 percent in the second quarter, up 2 percentage points from the year-earlier period, according to new data that doubtless will interest those gauging the antitrust implications of the search leader's new advertising partnership with Yahoo.

According to the statistics from search marketing firm Efficient Frontier, which bases its conclusions on data from a specific set of large-scale search advertisers, Yahoo dropped nearly 2 percentage points to 17.8 percent of spending and Microsoft stayed level at about 4.8 percent.

Search ads are shown next to … Read more

Update at 10:44 a.m. PDT: I added Google's "no comment." Update at 9:50 a.m. PDT: I added more details from the complaint.

AttorneyHal K. Levitte has sued Google over ads that cost $136.11 but that allegedly didn't yield any useful results.

The suit was first reported by InformationWeek.

Google placed 202,528 Levitte International ads shown in relation to parked domain pages--Internet addresses that have been registered but that have no Web pages--and 1,009 ads on error pages that can be shown when people type invalid URLs into their … Read more

Online advertising prices remained roughly flat in June compared with April and May, but some categories of sites fared better than others, according to data released Tuesday.

Overall, the cost of online ads, as measured by effective cost-per-thousand impressions, dipped a bit from 38 cents in April to 37 cents in May to 36 cents in June, said Pubmatic, which sells technology designed to help advertisers fine-tune online ad campaigns. The company measures ad prices through its network of more than 4,000 customers that place ads on various Web sites, largely in the United States.

Of the five categories … Read more

Veoh Networks, an online video start-up featuring content such as Lost, ESPN SportsCenter, and The Bachelorette, has begun a beta test of advertisements geared to users' earlier video-watching history and other activity at the site.

The new ad system "combines video consumption, searching, browsing, and community activity data from Veoh's more than 28 million viewers to deliver branded ads and content to viewers across multiple lifestyle and interest categories," the Los Angeles-based company said Monday. Tests of the system showed targeted ads perform more than twice as well as ordinary ads, the company said.

Behavioral advertising offers … Read more

Gannett Co., which operates 23 television stations and 85 newspapers in the U.S. including USA Today, has signed on to AOL's Platform-A as its digital advertising partner. More specifically, it'll be using Platform-A's Adtech, marking the U.S. debut of the formerly Europe-only division.

When the deal has rolled out completely, it'll encompass all of Gannett's local news markets for both print and broadcast, USAToday.com, and other Web properties that the company owns. No target date was provided. But it's a big deal for AOL, considering the reach of USA Today as … Read more