Google Inc. said Monday it agreed to acquire start-up Teracent Corp., which has developed computer algorithms designed to deliver customized display ads on Web sites.

The acquisition is Google's latest move to bolster its presence in the online display-ad market, a business dominated by rival Yahoo Inc. It wasn't immediately clear how the deal will impact Teracent's partnership with Yahoo to deliver mobile ads.

Financial terms of the deal weren't disclosed.

The technology developed by San Mateo, Calif.-based Teracent allow advertisers, agencies and ad networks to pick and choose the format of display ads in real time, such as changing an ad's images, products, messages or colors. The changes are based on factors such as a Web page's content, the time of day and the user's location..

Google, which makes almost all of its revenue from text ads that appear next to search results, indicated its interest in display ads by acquiring DoubleClick for $3.1 billion last year. The company has also announced plans to buy AdMob, a start-up focused on ads for mobile devices, for $750 million.

Write to Scott Morrison at scott.morrison@dowjones.com