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Google kills radio ads program as it refocuses on Web search

February 12, 2009 |  4:41 pm
Google killed the radio star? Credit: C.P. Storm via Flickr.

Continuing its retreat from traditional media, Google is bowing out of the radio advertising business. It plans to keep trying to sell ads for streaming audio on the Web.

The cutback reflects a general belt-tightening at Google, which is trying to curb its big spending by shutting down businesses that aren't working.

The Internet giant launched its radio efforts three years ago as part of a broader expansion beyond search-engine marketing. The Google Audio Ads and Radio Automation programs sought to create new revenue streams for broadcast radio, and streamline the process of buying and selling radio ads. No longer.

"While we've devoted substantial resources to developing these products and learned a lot along the way, we haven't had the impact we hoped for," Susan Wojcicki, vice president of product management, wrote in a post on the company's Audio Ads blog. About 40 Googlers will be laid off as a result.

Google had bought DMarc Broadcasting, a Newport Beach company with radio advertising technology, in a 2006 deal that was initially valued at as much as $1.1 billion (the final price was much less because the unit missed performance targets). The acquisition allowed Google to dip its toes into the radio business. The search giant says it plans to keep offering radio ads until May 31 and then ...

... focus on streaming audio.

The radio-ads group isn't the first Google tree to fall. In January, the company said it was killing its Print Ads program. A week earlier, it ended uploads to Google Video, closed its mobile social networking service Dodgeball, and shut down Google Catalog Search.

"We have always accepted that if you take risks not all of them will pay off," Wojcicki said in the post today.

But the Internet giant's decision to pull out of radio and print is a statement on the advertising viability of those mediums, said Greg Sterling, an analyst at Sterling Market Intelligence. Google had told him last month that it planned to keep the radio program growing, despite closing Print Ads.

"It's just not making them enough money for the cost," he said. "It speaks to the weakness of the medium itself."

What's more, he said, the recent cutbacks suggest that Google's effort to make itself a multi-platform media company is dormant. In recent years, the search giant has branched off into display, video, TV, radio and print ads, and it has even flirted with digital billboards and signs. Now it seems to be closing those efforts down to focus on its core product.

Don't count Google out of the media giant race for good, though. "It will probably resurface in a less ambitious form when the economy revives," Sterling said.

-- Alana Semuels