Article from Reuters:
Google to buy radio advertising company
Tue Jan 17, 2006 1:22 PM ET
By Eric Auchard
SAN FRANCISCO (Reuters) - Web search company Google Inc. (GOOG.O: Quote, Profile, Research) said on Tuesday it agreed to pay $102 million for radio advertising firm dMarc Broadcasting Inc., in a deal that could eventually be worth up to $1.24 billion.
Privately held dMarc of Newport Beach, California connects advertisers to radio stations through an automated advertising system, simplifying the process of selling, scheduling and delivering ads, said Google, of Mountain View, California.
"This is the first major 'public' statement that Google intends to be a kind of one-stop shop for its advertisers," analyst Greg Sterling of Kelsey Group wrote on his Web log.
The move into radio ad-buying could be followed by expansion into the television ad-buying market by the world's leading provider of Web search-based online advertising, he said.
Google said it agreed to an up-front cash payment of $102 million and additional payments totaling up to $1.14 billion over the next three years. The additional payments would depend on revenue and ad inventory goals being met, it said.
It said dMarc technology would be integrated into the Google AdWords business to create a new radio ad distribution channel for Google advertisers.
The deal is expected to close in the first quarter.
Google has sought to enter new industries almost as quickly as its market value has appreciated. Most recently, Google has launched an Internet video service offering CBS Corp. (CBS.N: Quote, Profile, Research) television shows and basketball games.
Sterling said that similar deals could follow that thrust Google more deeply into the television advertising market.
He pointed to Spot Runner, a local cable television buying service, that he said "is a similar example of a kind of company that we would expect Google to also want to acquire -- or at least a similar capability -- to extend into TV."
Martin Pyykkonen, a financial analyst with Hoefer & Arnett in Boulder, Colorado, said the acquisition is another sign of Google's desire to move beyond online advertising.
"As you move upstream and start to talk to Fortune 1000 accounts, those companies want to deal with multiple channels -- radio, TV (and) print," Pyykkonen said, referring to various advertising distribution routes.
As Google expands into these other media, the danger is that the company will be seen as more of a competitor with advertising agencies -- potentially putting it in competition with some of its biggest buyers, Pyykkonen cautioned.
Google's stock price has more than quadrupled since its initial public offering in 2004.
Shares of Google fell $1.70, or less than 1 percent, to $464.55 on the Nasdaq after trading as high as $469.90 earlier.
(Additional reporting by Kenneth Li in New York)
© Reuters 2006. All Rights Reserved. <P ID="signature">______________
"The only thing that sustains one through life is the consciousness of the immense inferiority of everybody else, and this is a feeling that I have always cultivated."
---Oscar Wilde</P>
Google to buy radio advertising company
Tue Jan 17, 2006 1:22 PM ET
By Eric Auchard
SAN FRANCISCO (Reuters) - Web search company Google Inc. (GOOG.O: Quote, Profile, Research) said on Tuesday it agreed to pay $102 million for radio advertising firm dMarc Broadcasting Inc., in a deal that could eventually be worth up to $1.24 billion.
Privately held dMarc of Newport Beach, California connects advertisers to radio stations through an automated advertising system, simplifying the process of selling, scheduling and delivering ads, said Google, of Mountain View, California.
"This is the first major 'public' statement that Google intends to be a kind of one-stop shop for its advertisers," analyst Greg Sterling of Kelsey Group wrote on his Web log.
The move into radio ad-buying could be followed by expansion into the television ad-buying market by the world's leading provider of Web search-based online advertising, he said.
Google said it agreed to an up-front cash payment of $102 million and additional payments totaling up to $1.14 billion over the next three years. The additional payments would depend on revenue and ad inventory goals being met, it said.
It said dMarc technology would be integrated into the Google AdWords business to create a new radio ad distribution channel for Google advertisers.
The deal is expected to close in the first quarter.
Google has sought to enter new industries almost as quickly as its market value has appreciated. Most recently, Google has launched an Internet video service offering CBS Corp. (CBS.N: Quote, Profile, Research) television shows and basketball games.
Sterling said that similar deals could follow that thrust Google more deeply into the television advertising market.
He pointed to Spot Runner, a local cable television buying service, that he said "is a similar example of a kind of company that we would expect Google to also want to acquire -- or at least a similar capability -- to extend into TV."
Martin Pyykkonen, a financial analyst with Hoefer & Arnett in Boulder, Colorado, said the acquisition is another sign of Google's desire to move beyond online advertising.
"As you move upstream and start to talk to Fortune 1000 accounts, those companies want to deal with multiple channels -- radio, TV (and) print," Pyykkonen said, referring to various advertising distribution routes.
As Google expands into these other media, the danger is that the company will be seen as more of a competitor with advertising agencies -- potentially putting it in competition with some of its biggest buyers, Pyykkonen cautioned.
Google's stock price has more than quadrupled since its initial public offering in 2004.
Shares of Google fell $1.70, or less than 1 percent, to $464.55 on the Nasdaq after trading as high as $469.90 earlier.
(Additional reporting by Kenneth Li in New York)
© Reuters 2006. All Rights Reserved. <P ID="signature">______________
"The only thing that sustains one through life is the consciousness of the immense inferiority of everybody else, and this is a feeling that I have always cultivated."
---Oscar Wilde</P>