Wow. Google is to acquire dMarc Broadcasting, a company that puts ads into radio stations, paying up to $1.1 billion for it. Google plans to distribute AdWords via radio this way. Says Google VP of advertising sales Tim Armstrong in the press release (and here at Google):
"Google is committed to exploring new ways to extend targeted, measurable advertising to other forms of media," said Tim Armstrong, vice president of Advertising Sales, Google. "We anticipate that this acquisition will bring new ad dollars and accountability to radio by combining Google's expansive network of advertisers with dMarc's talented team and innovative radio advertising technology. We look forward to working together to continue to grow and improve the ecosystem of the radio industry."
Google is to pay $102 million up front as part of the deal, with a maximum amount of $1.136 billion possibly paid over the next three years. The acquisition is expected to close in the first quarter of 2006.
Guess anyone still entertaining the notion of Google as a technology company versus a media company can put that to bed. Putting ads on radio isn't really a technology business. Nor is it central to that mission of organizing the world's information. Neither is putting ads into print or slapping them up all over the web, either
I wrote earlier that Google's philosophy page needed some changes to keep up with the times. In particular, that famous mission that currently reads:
Google's mission is to organize the world's information and make it universally accessible and useful.
Really ought to say:
Google's mission is to fund and organize the world's information and make it universally accessible and useful.
Because the ads to little to organize anything. At best, they can be argued to help fund information (along with a lot of crud -- I just saw an AdSense ad promising "AdSense Ready Content: Over 300 premade websites ready. Immediate download! 1000's of pages."
Postscript from Gary: Here are a few facts about dMarc that I've learned from perusing their web site:
- Although I wouldn't doubt that Google goes out one of these days a purchases radio stations, dMarc doesn't own any radio stations they provide the advertising and programming software.
- They also have their own advertising network that you can learn about their network here. This page explains how the dMarc tech can be used to target an audience.
- dMarc has more than 4600 radio stations using it's "digital trafficking" (ad scheduling) and "studio automation" software.
- dMarc used to be in the online ad business. From their web site, "In 1998, dMarc management launched an online advertising sales and media group, 2CAN Media, which became the 3rd largest ad network on the Internet, which represented marquee clients such as Better Homes and Gardens, MotorTrend, and Jacor Communications (later acquired by Clear Channel Communications). 2Can Media was later sold to CMGi, managed under Engage Media."
- Learn more about dMarc software here.
Postscript 2 from Gary: In a report to clients, Benjamin A. Schachter from UBS Investment Research writes,
The key takeaway from this transaction is that it highlights GOOG's intention to export its advertising solutions across all forms of media. We think The Street too often looks at GOOG's product pipeline as a means to diversify revenue, when it is really a means to increase distribution of ads. Increasingly, these ads will be positioned on non-PC devices, through radio, video, mobile, etc...