Google To Enter Radio Market
Google is on a radio sales hiring spree and is spending heavily in a bid to expand its position in the $20 billion radio industry by offering a new technology, Google Audio Ads. Radio stations will be able to go online and sign up for targeted radio ads using the same AdWords system they use to buy Web search ads. Google spokesman Michael Mayzel said this week that the company will begin a public test of Google Audio Ads by the end of the year.
It made a clear move into radio in January when it agreed to pay more than $1 billion, depending on performance, for dMarc Broadcasting Inc., which connects advertisers to radio stations through an automated advertising system. It’s all part of what Google Chief Executive Eric Schmidt has said is an investment in radio advertising that could grow over time to include up to 1,000 Google employees, not just in ad sales, but also in engineering and operations.
It is widely rumored that Google has been in talks to buy about $1 billion in radio advertising inventory from Clear Channel Communications Inc. Google’s move into radio comes at a time when Clear Channel, the biggest radio station operator, is weighing a possible sale of the company. Clear Channel, which controls an estimated 20 percent of local radio industry revenues, declined to comment on recent reports that Google could take a stake in the radio company, perhaps as part of a buyout led by private equity firms.
Clear Channel’s size and potential sale make it a likely source of inventory for Google, either through Google taking a modest investment in a leveraged buyout or by taking a stake in the company’s current incarnation. Two private equity consortia are looking into making bids for Clear Channel, sources familiar with the matter said late last month. Analysts estimated an offer could approach $40 per share, valuing the company at just under $20 billion.
