Google has just announced a host of new features for its image search product at a press event in San Francisco. Director of Search Products Ben Ling described the revamp as “the largest redesign” in the product’s history.

A number of those changes should improve the experience for searchers (and I’ll get to those changes in just a second), but the most significant upgrade, from a business perspective, is the introduction of a new type of advertising unit. Google already runs text ads above some image searches, and it also has limited support for image feeds from retailers. But now it’s allowing any advertiser to include images with their text and to target those visuals towards a particular Image Search term. It seems like an obvious move, and could be extremely powerful for product-related searches.

Googlers hinted that these ads could also expand beyond Image Search. Ling said Google isn’t making any announcements on that front today, but “it’s certainly worthwhile for us to explore.” This would be a big change for the company, which has a well-established practice of keeping its search advertising largely bare-bones and text-driven. A reporter suggested that this would be a big change. Vice President of Search Products Marissa Mayer (pictured above) replied that people are often looking for different media types in the searches.

“It makes sense to match the ad format to the results in order to provide better relevance to our users,” she said.

Ling and Mayer declined to offer many specifics about how much more money they expect to make from the visual ad units compared to text, or how many of the image searches seem to have a commercial intent. But they confirmed that advertisers should expect to pay more for a visual ad (no surprise). They also said Google Image Search receives more than 1 billion pageviews per day.

As for the overhaul of the user interface, there were three big changes. First, there’s a new layout on the search pages themselves, cramming many more images together and stripping away most of the other content and white space on the page. With the new layout, users shouldn’t have to click on page after page of search results, but can bring up to 1,000 results on a single page. Then they can hover their mouse over a result to bring up a larger image with more detailed information, which should give them more context about whether this is the image they’re looking for. Lastly, Google is getting rid of the annoying frame that you see above a page when you click on an image result — now you’ll to be sent to a version of website with a blown-up version of the image floating above the page. Click behind the image and you see the website itself.

The new version of Image Search has already started rolling out to users, and the process will continue over the next few days. Like some of the other recent changes to Google’s interface, you can detect the influence of Microsoft’s search engine, Bing, despite the fact that Googlers constantly say they don’t pay attention to the competition.