Broadcasters reassured by Google
Google moved to reassure broadcasters on Monday that the Internet company was not encroaching on their turf after announcing two major deals that widen its scope in the advertising industry.
"Google is a new phenomena. It does not replace radio and television," Google Chief Executive Eric Schmidt told delegates at the National Association of Broadcasters' annual conference.
Over the weekend, the web search leader announced a multi-year advertising sales agreement with the largest U.S. broadcaster, Clear Channel Radio. That announcement came just days after it said it would gobble up web ad supplier DoubleClick, beating out competitors Microsoft Corp. and Yahoo Inc. in the process.
"It seems to me that Google has an advertising business that can add to the success of radio and television worldwide," Schmidt said.
Clear Channel said it has agreed for Google to sell a guaranteed portion of the 30-second spots available on its 675 radio stations in top U.S. markets, in a bid to expand the universe of local radio advertisers to Google's online buyers.
Earlier, the Mountain View, California-based company revealed a similar deal to supply satellite TV broadcaster EchoStar and its 13 million viewers.
Schmidt said it looks like advertising in radio and television has been relatively flat in revenue growth. "If our technology can bring more advertisers to radio, I think that is a good thing," he said.
Google's pay-per-click web search ad system has transformed the effectiveness of online advertising.
"Advertisers care about efficiency, measurability, targetability," said Schmidt. "The tools that Google are developing are simply better tools than the previous generation of technology."
Schmidt brushed aside concerns that Google was taking away ad revenue from broadcasters and said that advertising as an industry is growing. "The money is there," he said. "It makes good sense to have an ad that is targeted to you. It is more important to have an ad that is more relevant to you."
Schmidt appeared amused at Microsoft's allegations that Google was anti-competitive by buying DoubleClick.
"A more likely scenario is that they were unhappy because they are competitors of ours," he said.
Microsoft, the world's largest software maker, said the deal would allow Google to corner the online advertising market and provide them access to a huge amount of information on consumer behavior on the Internet.
AT&T and Time Warner Inc. said they hoped regulators would scrutinize Google's DoubleClick deal.
The importance of Google was not lost on the thousands of delegates at the broadcasters' convention. The line to hear Schmidt speak wound out the door.
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