May 8, 2008 3:45 PM PDT

Schmidt hints at coming YouTube ads

Posted by Stephen Shankland

MOUNTAIN VIEW, Calif.--YouTube users soon will see some new advertisements around their online videos.

Google Chief Executive Eric Schmidt said the company is working on new ads for the video site in a meeting here with reporters before Google's shareholder meeting, but he was cagey with details.

Google CEO Eric Schmidt

(Credit: Elinor Mills/CNET News.com)

"We have new ad products that are not pre-roll and post-roll," he said, referring to ads that show up before and after videos. "We have new approaches. Think of them as ads that are in the context of YouTube. They use the page around YouTube in interesting ways."

The new ads will launch "over the next few months," Schmidt added.

Schmidt has made no secret of his desire to make more money from YouTube, the dominant video site on the Internet; Google acquired YouTube for $1.65 billion. In an interview last week with CNBC, he said about YouTube, "We're working but have not yet in my view gotten a breakthrough around monetization...We're working on that. That's our highest priority this year."

For what it's worth, Google last year experimented with overlay ads that pop up within the YouTube video player itself for a few seconds. They didn't go over too well with some viewers.

Google, which bought YouTube in October 2006 for $1.65 billion in stock, makes the vast majority of its money from text ads that show up next to search results, but in particular through its acquisition of DoubleClick, it's working to improve its business in display ads.

"We are not the leader in display ads. As far as I can tell Yahoo is," Schmidt said.

And of what will make Google's display ads different from the rest of the market, he said, "We always want to be the most targeted. Greater targeting leads to greater advertiser value."