Google, the world’s largest search engine and the owner of the world’s largest online advertising platform, has been granted a major U.S. patent for “determining and/or using location information in an ad system.” In other words, Google now owns a key patent for location-based advertising.

The patent, which was first discovered by Venturebeat, was filed nearly seven years ago, in September 2003, but was only granted last week.

Since then of course, location-based advertising has boomed with companies such as AdMob (acquired by Google) and Quattro Wireless (acquired by Apple) leading the charge.

That patent itself focuses on making sure businesses can better target their ads based on location information so that they can do things such as price arbitration (e.g. figuring out prices for items near you and getting the best deal). It also deals with the user interface and defining geographic areas.

This is the second major tech patent to surface this week. A week ago, Facebook won the patent for news feed, stirring up big questions over whether Facebook would use the patent to force other companies with news feeds to take down or change their technologies.

Google’s new location-based advertising patent raises the same questions, but as we said in the news feed article, there is a huge reputation and financial cost to litigation related to patents. At the very least though, it gives Google an advantage in mobile advertising, especially against Apple, who is quickly becoming its primary rival.

Here is the full abstract from the patent:

“The usefulness, and consequently the performance, of advertisements are improved by allowing businesses to better target their ads to a responsive audience. Location information is determined (or simply accepted) and used. For example, location information may be used in a relevancy determination of an ad. As another example, location information may be used in an attribute (e.g., position) arbitration. Such location information may be associated with price information, such as a maximum price bid. Such location information may be associated with ad performance information. Ad performance information may be tracked on the basis of location information. The content of an ad creative, and/or of a landing page may be selected and/or modified using location information. Finally, tools, such as user interfaces, may be provided to allow a business to enter and/or modify location information, such as location information used for targeting and location-dependent price information. The location information used to target and/or score ads may be, include, or define an area. The area may be defined by at least one geographic reference point (e.g., defined by latitude and longitude coordinates) and perhaps additional information. Thus, the area may be a circle defined by a geographic reference point and a radius, an ellipse defined by two geographic reference points and a distance sum, or a polygon defined by three or more geographic reference points, for example.”

Tags: advertising, Google, lbs, location based advertising, patent