Google Eyes New Ad Markets


Google Inc. has accelerated its efforts to sell advertising for magazines and newspapers while continuing to gear up for potentially lucrative opportunities in broadcasting and mobile devices, Chief Executive Officer Eric Schmidt said Thursday.

Schmidt updated a small group of reporters on the online search engine leader’s expansion beyond the Internet during a casual lunch that also was attended by Google co-founders Larry Page and Sergey Brin.

The triumvirate touched upon a wide range of subjects, but questions about Google’s finances or the current state of the Internet advertising market were forbidden because the company just completed its third quarter.

Internet powerhouse Yahoo Inc. last month warned its advertising growth slowed late in the quarter, raising investors’ curiosity about Google’s results, which are scheduled to be released Oct. 19.

Besides touching upon Google’s ambitions in new advertising markets, the company’s brain trust also emphasized the company’s plans to sculpt its hodgepodge of technology products into a more cohesive unit revolving around its search engine.

“We don’t want people to have to learn about 20 different products that work in 20 different ways,” Brin said. “I was even getting lost.”

In his comments, Brin also hinted that Google may tweak its technology so online videos appear on the first page of responses to search requests.

“Often times in research, video can be a very good answer to a question,” said Brin, who cited requests about lock-picking and diving as examples. When asked if Google planned to change its algorithms to list videos as possible solutions, Brin said, “It’s an oversight that it’s not true today.”

Developing new advertising channels has ranked among Google’s top priorities so the company is less dependent on a single medium. The Mountain View-based company generated virtually all of its revenue — totaling $4.7 billion during the first half of this year — text-based ads displayed on thousands of Web sites, including its own.

By its own executives’ admission, Google’s off-line efforts got off to a bumpy start last year when it began placing ads in a few magazines.

After making a series of adjustments in recent months, Google is now lining up ads for nearly 100 magazines, Schmidt said. He said the company also is exploring opportunities to help newspapers reverse the industry’s recent decline in classified advertising.

Schmidt said Google’s plans to being placing radio ads by the end of this year remain on schedule, contradicting recent talk within the industry that the company had postponed the project. “The tests are going extremely well,” said Schmidt, who added Google eventually plans to employ about 1,000 workers in its radio division.

Google acquired a toehold in the radio advertising market last year with a $102 million purchase of dMarc Broadcasting. The company has promised to pay another $1 billion to dMarc if undisclosed financial targets are hit.

Developing a system to deliver text-based ads in the United States to cell phones and other mobile devices is also in the works, Schmidt said. Google already is testing the technology in Japan, where it makes more money from its mobile ads than it does from ads displayed on personal computers.

Yahoo, which runs the Internet’s second largest marketing network behind Google’s, began testing mobile ads in the United States and United Kingdom earlier this week.

“The mobile advertising market should be, eventually, more successful than the fixed market,” Schmidt said. “A year from now, hopefully, we will have integrated offerings that target the person and the phone.”

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