Google Takes on OpenX

This morning, Google said it was launching a hosted ad server program for small- to medium-sized web publishers called Ad Manager. As it happens, I was on the phone with James Bilefield, CEO of open-source ad-serving company OpenX (formerly Openads). Bilefield gave the usual this-validates-our-market spiel heard from entrepreneurs whenever a large competitor enters his company’s space, but he was also eager to point out that Google’s version is hosted, whereas OpenX can be downloaded and run on a publisher’s own servers — keeping their revenue and ad information in-house.

Right now, OpenX serves about 30,000 mostly small- to medium-sized publishers with “billions of ads per day,” according to Bilefield. Google’s recent buy of DoubleClick gives it an ad server for the large sites, but Bilefield says that now that the deal has closed, OpenX is winning a few customers based on worries that Google, which is both a publisher and an ad server, might compete against some of DoubleClick’s clients. It’s a similar argument made in the OpenX blog today.

Bilefield is nonplussed by this argument announcement, noting that Ad Manager has been in trials for a year and is now opening up only in public beta (to be fair, that’s how Google does things). OpenX recently scored $15.5 million in a second round of funding, and announced its own hosted ad server. OpenX makes most of its money helping ad networks source publishers. If Google Ad Manager takes off in the smaller publisher markets that OpenX services, advertisers may turn to Google for that service, or see OpenX as second-tier.