Google announced on Monday it plans to acquire Teracent, an online display advertising company.  Financial terms of the deal were not disclosed other than Google saying on its blog, "we've entered into a definite agreement to acquire Teracent." 

The move signals Google's strong interest in the display advertising market, up until now the search giant has made money from short text ads that show up alongside search results.

San Mateo, Ca.-based Teracent is the developer of a technology which has the ability to build and customize display ads automatically and in real-time by making use of machine-learning algorithms.  The technology picks and chooses from thousands of creative elements.  It can tweak elements like images, products, messages and colors, then in turn optimizes them based on factors like geographic location, language, and most importantly, time of day or the past performance of different ads.

Google commented on its blog saying, "We think that this technology has great potential to improve display advertising on the web...As you know, we've been busy releasing new features and products to help improve display advertising on the web for everyone.  We believe that Teracent's technology fits neatly into these efforts."

Once Google integrates Teracent's technology, it said it would make it available to its display advertising clients running campaigns on the Google Content Network and DoubleClick.  

Workers from Teracent will join Google.  The startup raised a total of $5.8 million from New Enterprise Associates.

Google recently bought AdMob for $750 million.