Google has announced plans to enter the world of display advertising, a market currently dominated by the firm's long-standing rival Yahoo.

Until now Google has relied on search advertising revenue from marketers and web publishers, a method that serves up highly relevant text ads alongside search results. Display advertising differs because it connects web users with more interactive ads containing images and video.

Google said that it would enter the market with a product that supersedes current offerings, such as those offered by Yahoo, with what it has named the DoubleClick Ad Exchange.

"We believe that a better system built on better technology can help grow the display advertising pie and benefit everyone," said Google product management vice president Neal Mohan in a blog post.

Google explained that it has been planning a launch into the display advertising space for some time, and started taking action when it bought ad exchange company DoubleClick last year. The firm has now combined the DoubleClick technology with its own

Google's current AdWords and AdSense programmes will be incorporated into the Ad Exchange real-time marketplace, which will help online publishers buy and sell display advertising space with ad networks, according to Google.

"By bringing them together in an open marketplace in which prices are set in a real-time auction, the Ad Exchange enables display ads and ad space to be allocated much more efficiently," explained Mohan.

"This improves returns for advertisers, and enables publishers to get the most value out of their online content."

Mohan added that the Ad Exchange will allow publishers to offer at a bargain ad space that they have not been able to sell.

Yahoo currently runs the largest ad exchange marketplace, and counts top newspapers and shopping sites like eBay among its customers. The company started targeting the display advertising market long before Google, buying DoubleClick competitor Right Media in 2007.

Since Carol Bartz became chief executive of Yahoo in January, her priority has been display advertising. The recent deal with Microsoft, which will potentially allow the two firms to create a force that will rival Google in search, was aimed at allowing Yahoo to concentrate on its priority areas of display advertising and mobile, Bartz said.

Google is now turning the tables and tackling Yahoo on its own precious turf. Mohan said in a promotional video that Google's Ad Exchange programme would be the best in the market, making the ads "more relevant, more engaging and faster".

Google will also aim to make it a lot easier for advertisers to "manage creative ad campaigns seamlessly across the web and manage the results so you know where your money is going".

For web publishers, meanwhile, Google will offer technology to let them select "the right ad for the right part of your site and at the right time to make the most money possible out of the valuable online content".