Google, which has dominated search advertising, is hoping to take over the display advertisement space by launching new DoubleClick Ad Exchange to create an open, real-time marketplace for large online publishers and ad networks and agencies to buy and sell display advertising space. In an announcement made on the company’s blog, Google says that display advertising, which are ad formats that include videos, images and interactive ads are becoming “vital in boosting awareness and sales” on the web.

Traditionally, publishers and advertisers using Google’s AdSense and AdWords products would have to manually plan their display ad campaigns. Now, publishers can tap into Google’s ecosystem for ads where prices are set in a real-time auction and advertisers can access a large pool of inventory within one platform.

Google says the benefits for publishers include the real-time allocation, letting them allocate ad space to the advertiser that pays the most at a given time; access to more advertisers; greater control over advertisers and ad formats, a sleeker UI, and payment system managed completely by Google.

And of course advertisers can access a platform that provides more publishers and ad space, a greater control over where a display ad appears, and access to a new API that lets advertisers and networks integrate their own functionality and systems when working with the Ad Exchange.

Google bought display ad provider DoubleClick in 2007 for $3.1 billion in cash, after apparently winning a bidding war with Microsoft. The announcement of this new marketplace is a direct move against Yahoo, which has dominated the display ad marketplace for some time.